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CLASS  VOLUME 


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books.  ^  ^j  J  Library 


FEW  HOURS'  TALK 


WITH 


A  Railroad  Man. 


BY 

THOMAS  H.  BOWNE. 


PHILADELPHIA,  PA. 
THE  BOWNE  PUBLISHING  COMPANY 

1894. 


COPYRIGHTED   BY 

THE  BOWNE   PUBLISHING  COMPANY. 

1894. 


3Sb 


INTRODUCTION. 


The  object  with  which  this  work  is  presented  to  the 
pubhc  is  to  demonstrate  the  practical  railroad  questions 
of  the  day  which  have  become  matters  of  public  concern. 
The  man  who  would  really  study  the  subject  would  of 
necessity  be  required  to  seek  his  material  and  informa- 
tion amongst  hundreds  of  different  arguments  and  re- 
ports, many  of  which  are  exceedingly  able,  and,  I  dare 
say,  few  of  them  easy  of  access,  and  still  fewer  at  all  com- 
plete in  themselves. 

The  author's  aim  is  to  treat  each  topic  in  simple  man- 
ner, having  in  mind  the  needs  of  new  men  who  may  en- 
gage in  the  service,  and  that  an  average  man  or  layman 
can  readily  understand  the  internal  affairs  of  a  company. 
Let  every  man,  therefore,  avail  himself  of  this  oppor- 
tunity, remembering  the  words  of  the  poet, 

"  The  best  that  we  can  do  for  one  another  is  to  ex- 
change our  thoughts  freely,  and  that  after  all  is  but  little." 

The  Author. 


7iOS6 


CONTENTS. 


EARLY  AMERICAN  RAILROAD  HISTORY. 

CORPORATION  OF  A  COMPANY. 

CONSTRUCTION. 

Location  OF  the  Road;  Actual  Construction  of  the  Road; 
FoKMiNG  the  Road  Bed  (Grading);  Ballasting;  Cross- 
Sleepers  and  Rails. 

RAILWAY  MANAGEMENT. 

Definition  of  Duties;  Handling  of  Trains;  Schedule  Mak- 
ing; RiccoRDiNG  the  Movement  of  Cars;  Skeleton  of  a  Rail- 
road Organization. 

FREIGHT  RATE  CONSTRUCTION. 

PASSENGER  RATE  CONSTRUCTION. 

FIXING  AND  CLASSIFYING  FREIGHT  RATES. 

CONSTRUCTION  OF  FREIGHT  CLASSIFICATION. 

CONSTRUCTION  OF  SCHEDULES  OR  FREIGHT  TARIFFS  AND 

PERCENTAGE  TABLE. 
RECEIVING,  FORWARDING  AND  DELIVERING  PROPERTY. 
REVENUE  AND  EXPENSES. 
ANALYSIS  OF  ACCOUNTS. 

RAILWAY  ASSOCIATIONS. 

Hon.  Aldace  F.  Walker,    Formerly   Chairman  of  Board 
Commissioners,  Western  Traffic  Association. 


EARLY  AMERICAN  RAILWAY  HISTORY. 


The  hi.5tory  of  railroads  in  the  United  States  is  very- 
interesting,  exhibiting  as  it  does  the  growth  and  develop- 
ment of  a  system  superior  in  all  respects  to  that  of  any 
other  country. 

The  American  railroad  system  is  the  most  wonderful 
product  of  human  invention,  adaptation  and  enterprise  of 
this  the  most  progressive  of  the  centuries.  It  correlates 
the  arts  and  possibilities,  and  to  its  peculiar  exigencies  of 
physical  characteristics  has  revolutionized  the  commercial 
methods  and  the  social  habits  of  the  world.  This  has 
been  accomplished  within  memory  of  persons  now  living ; 
the  railroad  mileage  has  increased  from  23  miles,  1830, 
to  over  170,000  m  1893. 

It  would  be  a  difficult  and  arduous  undertaking  to  pre- 
sent and  trace  each  stage  of  proceedings  which  led  to  the 
establishment  of  railways  in  the  United  States.  The  sub- 
ject alone  with  its  magnitude  would  certainly  be  a  volume 
within  itself;  yet,  however,  there  are  some  important  pro- 
ceedings connected  with  the  subject  which  I  shall  present 
to  the  reader  in  a  brief  tone  that  will  be  of  some  interest 
to  him.  When  the  Stephensons,  of  England,  made  a  trial 
trip  of  their  locomotive  before  the  people  of  that  country 
they  thought  it  a  wonderful  piece  of  ingenuity,  and  it 
was  beyond  a  doubt  such.  It  received  considerable  appre- 
ciation ;  but  when  we  center  our  thoughts  upon  one  who 
was  even  as  much  of  a  genius  as  he  was,  we  cannot  give 
the  credit  in  its  entirety  to  him,  but  come  to  our  own 
country  and  bestow  the  graces  of  a  good  loyal  American 

7 


8 

citizen  upon  one  worthy  of  it,  "  Oliver  Evans."  At 
some  periods,  few  things  were  attempted  which  were  not 
imitations  of  something  that  had  previously  been  done 
in  Great  Britain.  This  rule  has  a  notable  exception,  the 
first  of  which  was  the  invention  of  a  high  pressure  engine 
which  under  favorable  circumstances  could  presumably 
have  been  developed  into  a  successful  primitive  locomo- 
tive by  Oliver  Evans,  an  able  and  successful  inventor,  at 
an  earlier  date  than  any  equally  important  forerunner  of 
the  locomotive  had  been  devised  elsewhere. 

There  were  no  railways  in  America  at  the  period  when 
Evans  first  conceived  his  idea  of  a  steam  roadwagon,  re- 
markable as  it  was  at  that  time.  He  has  the  honor  of  be- 
ing the  first  citizen  of  the 'United  States  to  devise  a  ma- 
chine capable  of  moving  itself  and  additional  weight  by 
steam  power  over  an  ordinary  street  or  road.  In  a  letter 
published  in  Nile's  Register,  dated  November  13th,  181 2, 
he  describes  at  length  the  steps  he  had  commenced  soon 
after  1772  to  construct  steam  wagons  and  to  organize 
methods  for  applying  them  to  useful  service,  and  which 
he  considered  his  most  remarkable  discovery.  At  one 
time  a  book  fell  into  his  hands  which  described  the  old 
atmospheric  steam ;  he  was  astonished  to  observe  that 
they  had  so  far  erred  as  to  apply  steam  only  to  create  a 
vacuum  and  to  use  the  mere  pressure  of  the  atmosphere 
instead  of  applying  the  elastic  power  of  the  steam  for 
original  motion,  the  power  which  he  supposed  irresistible. 
Having  been  forcibly  impressed  that  his  aspects  were  cor- 
rect, he  renewed  his  studies  with  that  persister>t  zeal 
which  he  possessed  and  soon  declared  that  he  could  make 
steam  wagons.  In  1776  he  petitioned  the  legislature  of 
Pennsylvania  for  exclusive  right  to  use  his  improvement 
in  flour  mills  and  steam  wagons  in  that  commonwealth. 


\ 


A  committee  was  commissioned  to  hear  his  pleadings ; 
they  came  to  the  conclusion  that  he  was  insane  by  his 
representations  concerning  steam  wagons.  Not  feeling 
at  all  discouraged  at  this  he  made  a  similar  application  to 
the  legislature  of  Maryland  which  resulted  favorably, 
mainly  on  the  ground  that  the  grant  could  injure  no  one 
and  the  encouragement  proposed  might  lead  to  some- 
thing useful;  but,  for  the  want  of  pecuniary  resources,  he 
was  compelled  to  abandon  his  pursuits. 

In  1 800  or  1 80 1  he  constructed  a  small  stationary  en 
gine  which  was  used  for  grinding  plaster  ;  this  fully  de 
monstrated  the  correctness  of  his  theory,  and  in  1804  he 
further  demonstrated  his  theory  by  building  a  machine 
for  cleaning  docks  which  was  propelled  by  steam  through 
the  streets  of  Philadelphia,  from  the  Delaware  to  the 
Schuylkill  rivers. 

Another  important  proceeding  is  presented  to  us 
by  that  venerable  and  judicious  gentleman,  Col.  J. 
Stevens,  of  Hoboken,  N.  J.  He  was  the  first  citizen  of 
the  United  States  who  combined  advocacy  Vv'ith  pcrsis- 
tance  and  faithfulness  that  led  to  any  final  practical  results. 
He  commenced  advocation  and  construction  of  a  railway 
about  1 8 10,  and  in  the  year  181 1  he  applied  to  the  legis- 
lature of  the  state  of  New  Jersey  for  the  first  American^ 
railway  charter,  which  was  granted  in  the  year  of  1815.     | 

In  the  year  of  1812,  when  the  question  of  construct- 
ing a  canal  from  Lake  Erie  and  to  connect  with  the 
Hudson  river  was  being  agitated.  Colonel  Stevens  urged 
the  New  York  commissioners  of  inland  navigation  to 
construct  a  railway  instead  of  a  canal.  His  suggestions 
however  were  rejected,  but  this  movement  did  not  prove 
fruitless  but  helped  the  public  to  direct  their  attention  to 
practical  use  of  improved  highways.     Failing  in  his  at- 


10 

tempts  to  secure  a  favorable  consideration  from  the  New 
York  commissioners,  and  like  all  other  ambitious  geniuses, 
he  published  his  suggestions  in  pamphlet  form  in  1S12 
and  made  an  earnest  appeal  to  the  Federal  Government 
for  the  purpose  of  having  an  experimental  railway  con- 
structed to  test  the  feasibility  of  his  plans.  His  efforts  on 
this  occasion  were  also  unavailable,  and  he  then  directed 
his  attention  to  secure  a  railway  charter  from  the  State 
'  Government  of  New  Jersey  authorizing  a  road  from 
:  Trenton,  N.  J.,  to  NcwBrunswick.  At  all  events  he  was 
successful  in  obtaining  a  charter  in  1 8 1 5,  but  being  unable 
to  speedily  obtain  financial  resources  to  construct  the 
proposed  road  he  abandoned  the  idea  and  directed  his 
attention  to  the  construction  of  an  experimental  railway 
of  his  own  in  Hoboken  in  1820.  In  the  year  of  181 8  or 
18 19  Colonel  Stevens  addressed  a  memorial  to  the  legis- 
lature of  Pennsylvania,  recommending  the  construction 
of  a  railway  from  Philadelphia  to  Pittsburgh,  and  in  the 
year  of  1S23  he  secured,  in  conjunction  with  other  cor- 
porators who  were  citizens  of  Pennsylvania,  the  passage 
of  an  act  by  the  Penns)dvania  legislature  authorizing  the 
construction  of  a  line  from  Philadelphia  to  Columbia, 
and  the  act  was  approved  on  March  31st,  1832. 
j  Oliver  Evans,  Col.  J.  Stevens,  and  Robert  Fulton  who, 
j  above  all  others,  best  represented  the  inventive  and  prac- 
tical talent  of  the  United  States  applicable  to  transporta- 
tion during  the  early  decade  of  the  nineteenth  century, 
adopted  advanced  views,  and  their  dissemination  was  a 
slow  progress  but  an  actual  demonstration  of  the  superi- 
ority and  utility  over  the  crude  railroad  or  tramways  on 
which  horse  power  was  used.  This  was  a  powerful 
agency  in  educating  the  public  mind  and  securing  the 
assistance  of  capitalists.     One  of  the  outgrowths  of  this 


II 

state  of  affairs  was  the  organization  in  Philadelphia,  in 
December,  1824,  of  the  Pennsylvania  Society  for  the  pro- 
motion of  Internal  Affairs  in  the  Commonwealth.  At  the 
outset  it  contained  48  members,  each  subscribing  $100.00 
for  the  immediate  promotion  of  the  cause  for  which  or- 
ganized and  an  additional  amount  of  $10.00  a  year.  In 
1825,  William  Strickland,  Esq.,  was  sent  to  England  in 
search  of  information  bearing  on  the  advancement  of 
railways.  He  furnished  valuable  information  and  for- 
warded reports  from  time  to  time  dating  from  June  16th, 
1825.  Up  to  1825  actual  work  had  been  simply  confined 
to  a  few  crude  railroads,  but  from  1825  to  1830  there 
was  considerable  anxiety  and  enterprise  displayed. 

After  the  publication  of  Mr.  Strickland's  reports,  the 
public  was  certainly  desirous  of  having  cheaper  transporta- 
tion, and  with  this  object  in  view  quite  a  number  were  con- 
structed. The  longest  and  most  important  one  was  the! 
Mauch  Chunk  R.  R.  which  was  completed  in  the  autunm 
of  1827;  a  line  used  for  the  purpose  of  carrying  coal. 
Others  were  constructed  for  similiar  purposes  but  are 
hardly  important  enough  to  be  noted  as  an  exception. 

Three  events  of  considerable  importance  were  the  pas- 
sage of  an  act  by  the  Penna.  legislature  in  1828,  which 
provided  for  the  construction  of  a  railway  by  the  State  of 
Penns)lvania,  to  extend  from  Philadelphia  to  York,  Pa., 
touching  at  Lancaster  and  Columbia,  Pa.,  which  was  pur- 
chased afterwards  by  the  Penna.  R.  R.  Co.  The  in- 
corporation of  the  Baltimore  and  Ohio  R.  R.  Co.,  to  ex- 
tend from  Baltimore,  Md.,  to  some  eligible  point  on  the 
Ohio  river,  by  the  legislature  of  Maryland  and  other 
states,  in  the  years  1827  and  1828,  and  the  Charleston 
and  Hamburg  Railway  in  South  Carolina  in  1827. 

The  latter  part  of  the  third  decade  of  the  nineteenth 


C 


12 

century  was  an  eventful  period.  It  formed  an  era  during 
which  sufficient  changes  in  the  prevailing  sentiment  were 
effected  to  make  the  year  of  1S30  a  vigorous  starting 
point  in  railway  improvement;  beyond  a  doubt  it  was 
certainly  a  remarkable  year  in  the  advancement  of  rail- 
ways in  the  United  States. 

The  State  of  Maryland  can  be  given  the  honor  for  tak- 
ing the  lead  in  the  construction  of  a  full-fledged  railroad, 
which  is  the  present  Baltimore  and  Ohio  R.  R.,  the 
pioneer  of  them  all;  this  road  was  chartered  in  1827  and 
begun  in  1828,  and  on  the  fourth  of  July  of  that  year 
Charles  Carrol,  last  surviving  signer  of  the  Declaration 
of  Independence,  laid  the  first  rail,  which  was  on  the  first 
section  of  the  line  and  extending  in  length  1 5  miles, 
and  opened  for  operation  in  1830. 

Railroads  in  the  early  periods  were  like  modern  street 
railroads  in  their  construction ;  that  is  to  say,  instead  of 
having  transverse  sleepers,  they  were  laid  upon  heavy 
wooden  beams  or  sills,  placed  lengthwise;  these  beams 
were  the  real  supporting  power;  the  rails  were  simply  a 
flat  strip  of  iron  to  protect  the  underlying  wood  from 
wear.  Roads  with  such  a  track  were  too  frail  and  would 
not  support  the  locomotives  that  were  being  shipped  from 
Eneland,  the  first  of  these  were  for  the  use  of  the  Dela- 
ware  and  Hudson  Canal  Co.  in  1828.  This  created  ad- 
vanced ideas  to  commence  manufacturing  locomotives  in 
this  country,  the  West  Point  Foundry  Works  being  the 
leader  in  the  matter. 

The  most  rapid  growth  centered  around  Philadelphia. 
To  the  northwest  was  a  system  of  coal  roads,  principally 
owned  by  private  parties,  and  were  connecting  links  to 
the  various  mining  properties.  In  1S33  the  Philadelphia 
and  Reading  R.  R.  was  chartered  and  opened  in   1838. 


13 

In  1846  the  Pennsylvania  R.  R.  was  chartered  and  the  I 
west  end  of  the  Camden  and  Amboy  route  was  opened  \ 
as  early  as  1832-34.     The  Philadelphia,  Wilmington  and 
Baltimore    R.    R.,    which  forms  a  part  of  the  world's 
greatest  system,  the  "  Penna.   R.   R.,"  was  chartered  in 
1 83 1-2  and  was  opened  in  Baltimore  in  1838. 

The  Baltimore  and  Ohio  R.  R.  advanced  but  slowly 
after  1835,  the  greatest  activity  being  shown  further 
south.  By  the  year  of  1840  there  seems  to  have  been  a 
continuous  line  of  rail  opened  from  Fredericksburg  via 
Richmond  to  Wilmington,  N.  C. 

The  Charleston  and  Hamburg  R.  R.,  chartered  in  the 
year  1827,  and  when  opened  in  the  year  of  183 3,  was  137 
miles  in  length  and  considered  the  longest  line  of  rail- 
road under  one  management  in  the  world. 

The  earliest  New  York  railroads  were  built  near  Al- 
bany. 

The  Mohawk  and  Hudson  (Albany  and  Schenectady) 
opened  in  1833. 

The  Rensselaer  and  Saratoga  in  1835. 

New  York  Central  route  was  opened  to  Utica  in  1836, 
and  to  Buffalo  in  1842,  though  the  consolidation  of  the 
different  sections  did  not  take  place  till  eleven  years 
later.  In  the  meantime  the  Plarlem  River  R.  R.  had 
been  opened  and  many  other  roads  were  well  under  con- 
struction, especially  the  Erie;  its  main  line  was  not 
opened  through  its  whole  length  till  185 1. 

In  Massachusetts  there  were  three  railroads  opened  from 
Boston  toward  Providence,  Worcester,  and  Lowell  respect- 
ively almost  simultaneously  in  1835.  The  whole  line  of 
the  Boston  and  Albany  was  completed  in  1842,  the 
only  road  that  has  the  distinction  of  being  the  only 
through  route  not  merely  supported  by  local  traffic. 


14 

In  Ohio  part  of  the  Cincinnati,  Sandusky  and  Cleve- 
land R.  R.  had  been  built  about  1837,  and  it  was  not 
until  1848  that  through  rail  connections  by  any  route 
whatever  was  secured  from  Cincinnati  to  the  Lakes. 

The  years  of  1840-1850  formed  a  period  of  rapid  rail- 
road construction  in  New  England,  more  rapid  than  in  any 
other  section  of  the  country  during  that  decade,  but  alter 
the  year  of  1850,  railroad  construction  in  New  England 
diminished  and  was  diverted  to  Middle  and  South  Atlan- 
tic States.  In  185 1,  the  Cleveland,  Cincinnati  and  Colum- 
bus R.  R.  was  opened  and  the  Cleveland  and  Pittsburg  in 
1852,  as  well  as  the  Michigan  Central  and  Michigan 
Southern  Lines.  In  1853,  the  connecting  link  between 
Cleveland  and  Toledo  was  opened,  furnishing  through 
rail  communication  to  Chicago,  and  in  1855  the  Chicago 
and  Galena  was  opened,  and  followed  up  by  the  Chicago 
and  Alton,  Chicago,  Burlington  and  Quincy,  and  Illinois 
Central.  The  Ohio  and  Mississippi  R.  R.  from  Cincin- 
nati to  St.  Louis.  The  first  line  to  reach  the  Missouri 
was  the  Hannibal  and  St.  Joseph  in  1858. 

The  railroads  of  the  United  States  have  certainly 
grown  from  the  year  of  1830,  when  the  first  full-fledged 
railroad  was  opened  for  traffic  in  this  country,  up  to  the 
present  time.  Until  the  year  of  1 850,  each  railroad  in  the 
United  States  was,  as  a  rule,  operating  independently  of 
all  other  companies.  The  idea  of  connecting  the  tracks 
of  diflerent  companies  having  a  termini  in  the  same  town 
was  repelled  by  railroad  managers  as  something  in  the 
nature  of  an  entangling  alliance  fraught  with  comphca- 
tions  and  administrative  difficulties  which  had  better  be 
avoided.  The  transportation  business  of  to-day  could 
not  be  handled  with  any  degree  of  dispatch  had  it  not 
been  for  the  consolidation  of  the  various  companies. 


IS 

The  social,  commercial,  postal  and  military  necessities 
of  the  age  were  certainly  elements  of  importance  towards 
brushing  aside  all  obstacles  to  the  formation  of  that  great 
American  railroad  system  which  is  to-day  unto  the 
traveler  and  shipper  as  one  instrumentality  of  transporta- 
tion, embracing  over  170,000  miles  of  track,  and  employ- 
ing, June  30th,  1892,  821,415  men.  If  the  total  popula- 
tion be  assigned  to  the  number  of  men  employed  on  rail- 
ways, it  appears  that  there  was  one  employee  to  each 
seventy- nine  inhabitants. 

With  these  figures  before  us  we  can  see  what  the  rail- 
way industry  is.  Considering  this  vast  organization  of 
human  devising  it  would  hardly  be  practical  to  conceive 
that  it  could  exist  with  the  absence  of  an  intelligent  direc- 
tory. 

The  American  railroad  system  was  not  a  thing  which 
could  run  alone.  Its  existence  involved  conventional 
agreements  touching  on  every  point  of  detail  and  co- 
operative arrangements  for  the  maintenance  of  such  rela- 
tionship. 

Associations  of  various  sorts  were  organized  to  bring 
them  all  together  as  a  unity.  Certain  of  these  organiza- 
tions are  based  upon  the  idea  of  managing  the  traffic  of 
great  geographical  areas,  while  others  take  cognizance  of 
crreat  traffic  currents.  There  are  also  associations  which 
have  for  their  object  the  management  of  through  cars,  i.  e., 
car  service  associations.  There  are  besides  these  claim 
associations  and  local  associations,  etc.,  etc.  These  as- 
sociations form  the  mind  or  legislative  thought  of  the 
American  railroad  system.  Their  functions  embrace  the 
classification  of  freight,  making  joint  rates,  traffic  facilities, 
the  apportionment  of  traffic,  receipts  from  traffic  and  a 


i6 

vast  volume  of  details  requisite  in'\  the  legislative  manage- 
ment of  so  great  a  transportation  system. 

With  these  facts  the  author  will  leave  this  subject  and 
repair  to  the  question  of  the  requirements  necessary  in 
organization. 


CORPORATION  OF  A  RAILWAY. 


We  have  now  come  to  consider  the  requirements  and 
powers  necessary  for  the  complete  equipment  of  a  com- 
pany or  corporation  for  the  transaction  of  its  business. 

The  author's  aim  is  to  present  in  this  chapter — first, 
Information  "  to  those  engaged  or  interested  in  the  hne 
of  steam  railway  business,"  in  the  organization  of  new 
corporation,  the  consolidation  of  existing  companies,  and 
the  charter;  second,  to  define  the  legal  and  commercial 
terms  which  are  used  in  the  business,  so  that  the  internal 
affairs  of  a  company  may  be  readily  understood  by  the 
average  man  or  stock-holder,  and,  thirdly,  to  name  some 
of  the  special  requirements  that  are  imposed  by  state  and 
municipal  authorities  in  the  granting  of  charters  and 
franchises. 

It  is  not  the  intention  to  invade  all  the  provinces  of 
the  legal  profession,  and  give  a  code  that  could  be  used 
without  legal  assistance,  but  to  illustrate  and  describe 
some  of  the  elementary  and  essential  features  of  certain 
legal  forms  so  that  a  common  ground  can  be  formed 
upon  which  the  layman  may  be  able  intelligently  to  dis- 
cuss the  business  of  the  company.  To  give  a  copy  of  all 
the  different  forms  in  use  and  compile  the  various  state 
enactments  this  chapter  would  expand  to  a  volume  of  an 
ordinary  law-book, 

A  charter  may  exiit  in  fact  or  only  in  name.  In  some 
states  the  filing  of  the  articles  of  agreement  with  the 
clerk  of  the  county  and  the  secretary  of  the  State  is  a 
presumptive   evidence   of  the   incorporation,    while    in 

17 


i8 

other  states  the  governor  issues  a  patent  or  charter  after 
the  articles  of  association  have  been  filed  with  the  secre- 
tary. Some  states  have  enacted  a  general  corporation 
law  under  which  all  corporate  bodies  are  organized,  while 
in  others  a  special  act  is  passed  in  each  case.  In  most 
cases  the  parties  desiring  to  form  a  corporation  or  com- 
pany take  the  initiative  on  their  own  account  and  after- 
wards file  their  articles  of  agreement. 

A  corporate  charter  is  a  contract  between  three  parties 
viz.:  the  state,  the  corporation,  the  stockholders.  First, 
it  is  a  contract  between  the  state  and  corporation,  "  an 
artificial  person  ;  "second,  it  is  a  contract  between  the  cor- 
poration and  the  stock-holders  ;  and,  thirdly,  it  is  a  con- 
tract between  the  stock-holders  and  the  state.  As  be- 
tween the  state  and  stock-holders,  the  contract  is  pro- 
tected by  that  provision  of  the  United  States  Constitution 
which  prohibits  a  state  from  passing  any  law  which  will 
impair  the  obligation  of  a  contract. 

A  charter  may  be  perpetual  or  may  be  limited,  and  if 
limited  may  contain  provisions  for  an  extension.  In 
some  cases  it  may  be  extended  by  filing  application  as 
in  the  first  instance,  but,  in  some  states  the  legislature  re- 
serves the  right  to  alter,  amend,  or  repeal  the  charter  at 
any  session.  The  reservation,  however,  is  generally  for 
the  protection  of  the  state's  interest  and  not  by  any  means 
for  the  benefit  of  the  corporation  or  individual.  A  state 
tax  for  the  privilege  of  organization  is  usually  imposed 
upon  corporations  having  capital  stock  divided  into 
shares,  which  tax  is  due  and  payable  before  the  certifi- 
cate of  incorporation  or  articles  are  filed. 

A  like  tax  is  also  required  in  some  cases  upon  an  in- 
crease of  capital  stock.  In  addition  to  taxes  a  fee  is 
demanded  for  filing  the  certificate  in  the  office  of  the 


19 

secretary  of  the  state  and  a  fee  of  cents  per  folio  for 

recording  in  both  tlie  county  and  state  records.  For  an 
example,  and  to  present  a  comprehensible  idea  what  the 
articles  of  corporation  should  consist  of,  will  give  the 
form  of  certificate  of  corporation  under  the  railroad  law 
of  the  State  of  Pennsylvania,  approved  April  4th,  A.  D. 
1 886,  to  wit : 

Articles  of  Association  of 

We,  the  undersigned,  nine  of  whom  are  citizens  of  the 
State  of  Pennsylvania,  do  hereby  form  a  company  for  the 
purpose  of  constructing,  maintaining  and  operating  a  rail- 
road for  public  use  in  the  conveyance  of  persons  and 
property  under  the  provisions  of  an  act  of  the  General 
Assembly  of  the  Commonwealth  of  Pennsylvania,  entitled 
"  An  act  to  authorize  the  formation  and  recrulation  of 
railroad  corporation,"  approved  April  4th,  A.  D,  1886, 
and  the  acts  supplementary  thereto ;  and  for  that  pur- 
pose do  make  and  sign  these  articles  of  Association, 

First. — That  the  name  of  the  said  company  is 

Second. — That  the  said  company  is  to  exist  for  the 
term  of 

Third. — That  the  places  from  and  to  which  the  said 
railroad  is  to  be  constructed,  or  maintained  and  operated, 
are  as  follows,  namely  : 

Fourth. — That  the  length  of  said  railroad  will  be  as 

near  as  may  be miles,  and  the  name  of  each  county 

in  the  state  through  or  into  which  it  is  made,  or  in- 
tended to  be  made,  is  as  follows,  viz  : 


20 

Fifth. — That  the  capital  stock  of  said  company  is  to 

be dollars,  being  at  least  ten   thousand  dollars   for 

every  mile  of  road  constructed,  or  proposed  to  be  con- 
structed, and    shall  consist  of shares,  of  a  par  value 

of dollars  each  share. 

Sixth. — That  affairs  of  the   company  shall  be   con- 
trolled by  a  president  and  a  board  of directors, 

and  the  following  are  the  names  and  places  of  residence 
of  those  who  shall  manage  its  affairs  for  the  year,  or 
until  others  are  chosen  in  their  places,  a  majority  of 
whom  are  citizens  of  Pennsylvania. 

Name.  Residence. 

PKESIIjEXT. 


DIEECTOES. 


/ 
In     Witness     Whereof    the    subscribers   to   these 

Articles  of  Association    have    hereto    subscribed   their 

names,  places  of  residence  and  the  number  of  shares  of 

stock  which  each  agrees  to  take. 

Name.  Residence.  No.  of  Shares. 


21 


AFFIDAVIT. 
State  of  Penna.,  County  of  ss  : 

Before  me,  the    subscriber,   a in  and  for    said 

county  and  state,  in  which  county  the  principal  of- 
fice of  the  company  is  designed  to  be  located,  duly 
authorized  to  take  the  aknowledgm.ent  of  deeds  person- 
ally came -being  three  of  the  directors   named  in 

the  foren-oin^  Articles  of  Association,  and  in  due  form  of 
law  acknowledged  as  their  act  and  deed  for  the  purposes 
therein  set  forth. 

In  testimony  whereof,  I  have  hereunto  set  my  hand 
and  seal  this day  of A.  D.  189— 


State  of  Penna.,  County  of  ss  : 

Personally,  before  me,  a in  and  for  the    county 

and    state    aforesaid,    came being    three    of    the 

directors  of  the and  named  as  such  in  the  fore- 
going Articles   of  Association,  who  being  duly  sworn, 

according  to  law  do  depose  and  say  that dollars 

for  every  mile  of  road  proposed  to  be  made  has 
been  in  good  faith  subscribed  thereto,  and  that  ten 
per  centum  paid  thereon  in  good  faith  and  in  cash  to 
the    directors    named    in     said    Articles     of   Associa- 


22 

tion  and  that  it  is  intended  in  good  faith  to  con- 
struct the  road  mentioned  in  said  Articles  of  Associa- 
tion. 

Sworn  to  or  affirmed  and  subscribed  before  me  this 
day  of A.  D.   189— 


After  these  Articles  of  Association  have  been  drawn, 
[  and  at  least  jiine  thousand  dollars  of  stock  for  eveiy  mile 
I  of  railroad  proposed  to  be  made  is  subscribed  thereto, 
and  ten  per  centum  paid  thereon,  in.  good  faith  in  cash 
to  the  directors  named  in  said  Articles  of  Association 
and  that  an  affidavit  is  endorsed  thereon  or  annexed 
thereto  "  as  the  foregoing  affidavits  "  made  by  at  least 
three  of  the  directors  named  in  said  articles  and  file  the 
same  with  the  articles  of  association  to  the  secretary  of 
state  whereupon  the  said  articles  shall  become  and  be  a 
charter  for  the  company. 

It  very  often  occurs  that  necessity  requires  the  chang- 
ing of  the  proposed  route  and  in  such  instances  proper 
certificate  must  be  drawn  setting  forth  the  required 
changes.  Again  it  may  be  necessary,  in  the  opinion  of 
the  directors,  in  order  to  fulfill  their  wishes  and  equip  the 
road  in  a  complete  sense,  to  increase  the  amount  of  capital ; 
this  can  be  done  by  filing  with  the  secretary  of  the  state 
a  certificate  setting  forth  the  amount  of  such  increase, 
whereupon  a  new  issue  is  granted  provided  the  original 
amount  of  stock  and  increase  shall  not  exceed  the  sum 
"fixed  by  law." 


STOCKS  AND  BONDS. 


The  term  stocks,  as  used  in  this  country,  covers  a  wide 
area  of  significations,  embracing  almost  every  species  of 
obligations,  from  the  best  secured  pledges  of  national 
and  state  indebtedness  to  the  personal  promise  to  pay  of 
individuals  Stocks  may  be  properly  divided  into  two 
classes,  namely  •  Interest  Stocks  and  Dividend  Stocks. 
Interest  Stocks  or  mortgage  bonds  are  those  calling  for 
a  certain  fixed  percentage  on  the  amount  loaned  or  the 
amount  which  they  represent  and  are  secured  by  mort- 
gage on  the  property  and  franchises  of  the  corporation. 
The  value  of  bonds  does  not  depend  upon  the  percen- 
tage of  dividends,  but  upon  the  character  of  the  securi- 
ties upon  which  they  rest  and  the  market  value  of 
money.  Bonds  are  disposed  of  through  trust  compa- 
nies, viz. :  The  officers  of  the  company  executes  a  mort- 
gage on  the  property  and  franchise  of  the  corporation  to 
a  reputable  trust  company,  which  in  turn  guarantees  the 
payment  of  the  bonds. 

The  bonds  are  printed  for  a  certain  amount  and  have 
coupons  attached,  stating  the  amount  of  interest  payable 
annually  or  semi-annually.  These  coupons  are  cut  off 
in  order,  as  the  interest  installments  are  paid,  and  are 
equal  in  number  to  the  interest  period  before  the  bond 
becomes  due.  In  disposing  of  the  shares  of  a  company 
the  directors  of  such  company  are  usually  constrained  by 
law  from  selling  them  belov/  the  par  value,  but  the  bonds 
may  be  given  away  or  be  sold.  The  annual  or  semi- 
annual income  to  bond-holders  is  a  fixed  and  certain 

23 


24 

amount  of  "  interest "  without  regard  to  the  success  of  the 
business,  while  the  income  to  stock-holders  is  uncertain, 
depending  upon  the  paying  or  passing  a  dividend.  Div- 
dend  Stocks  are  of  two  classes,  namely :  Common  and 
Preferred.  Common  Stock  is  the  original  or  considered 
capital  stock.  Preferred  Stock  is  created  by  a  special 
legislative  enactment  and  may  differ  in  any  state.  Holders 
of  preferred  stock  are  entitled  usually  to  a  certain  fixed 
amount  or  per  cent,  of  the  net  earnings  before  or  in 
preference  to  that  of  common  stock.  In  some  states  the 
preferred  stock-holder  is  not  liable  for  any  debts  of  the 
company,  the  debts  falling  absolutely  upon  the  common  or 
original  holders. 

Watered  Stock.  In  some  states  companies  are  re- 
quired by  law  to  pay  to  the  state  all  profits  over  and 
above  a  certain  per  centage  on  amount  of  capital  in- 
vested. Wherever  this  be  the  case,  and  in  order  to 
evade  this  obligation,  they  increase  their  capital  stock 
to  a  sum  large  enough  to  reduce  their  percentage 
of  profit  to  the  rate  limited  by  their  charters.  This 
is  called  watering  stock.  For  example :  The  Penn- 
sylvania Railroad  Company  has  a  paid  up  capital  of 
^1,000,000;  the  state  requires  railway  companies  to 
pay  to  it  all  excess  of  profit  over  six  per  cent,  per 
annum ;  it  is  to  be  seen  that  this  company  v/ith  its  present 
capital  will  earn  during  the  coming  year  at  least  twelve 
per  cent,  net  profit,  that  is,  560,000  for  itself,  and 
;^6o,ooo  which  should,  according  to  its  charter,  be 
paid  to  the  state.  Now,  in  order  to  defraud  the  state  of 
these  ;^6o,ooo  the  company  increases  its  capital  stock  to 
;^2,ooo,ooo,  thus  making  the  percentage  of  profits  six  per 
cent,  on  ;$2,ooo,ooo,  instead  of  twelve  per  cent,  on  51,000, 
000,  and  thereby  retaining  $120,000,  and  giving  the  state 
nothing. 


CONSTRUCTION  OF  THE  ROAD. 


While  I  do  not  intend  in  this  chapter  to  invade  all  the 
principles  and  mathematical  problems  connected  with  this 
branch  of  railway  construction,  yet  in  order  to  make  the 
question  clear  the  author  will  give  a  general  outline  of  it 

The  first  object  for  consideration  in  examining  a  pro- 
ject for  a  railroad,  is  the  nature  and  extent  of  the  traffic 
to  be  provided  for.  If  this  is  large  and  of  character  to 
demand  high  speed,  the  work  must  be  adapted  to  bear 
the  contemplated  service  ;  bridges  and  rails  must  be 
stronger  than  for  lighter  traffic  and  lower  speed.  If  a 
light  traffic,  and  especially  where  a  lower  rate  of  speed  is 
anticipated,  much  may  be  saved  in  the  expense  of  con- 
struction, and  also  in  the  expense  of  operating  the  road 
by  adapting  the  work  to  the  service  to  be  performed. 

Location   of  the  Road. 

The  location,  or  layout,  of  a  road  consists  in  determin- 
ing and  marking  out  on  the  ground  those  points  through 
which  the  road  should  pass.  In  the  location  of  the  pro- 
posed line,  the  engineer's  first  duty  is  to  make  a  survey 
by  eye  without  the  aid  of  instruments,  which  is  called 
"  Reconnaissance."  This  is  a  rapid  preliminary  survey 
of  the  region  through  which  the  road  is  to  pass,  and  is 
generally  made  by  the  eye  alone  without  instruments. 
It  is  intended  to  be  only  an  approximation  to  accuracy, 
and  serve  to  determine  through  what  points  the  route 
should  be  instrumentally   surveyed.     The   road-maker 

25 


26 

must  examine  the  country  map  in  hand,  visit  and  identify 
tlic  points  selected  on  the  map  and  see  whether  his  closest 
decision  has  been  correct.  He  must  go  over  the  ground 
backwards  and  forwards  in  opposite  directions,  for  it  will 
appear  quite  different,  and  convey  very  dissimilar  impres- 
sions, according  to  the  points  from  which  it  is  viewed. 
Thus,  a  hill  which  one  is  descending  may  seem  to  have 
a  very  easy  slope,  while  it  may  appear  veiy  steep  to  one 
ascending  it.  After  the  general  position  of  the  line  has 
been  agreed  upon,  the  engineer  in  charge  takes  up  the 
different  maps,  and  lays  down  a  new  line  which  may 
coincide  with  that  surveyed  or  perhaps  be  quite  different. 
The  parties  are  then  sent  back  into  the  field  and  stake  out 
the  new  line  called  the  approximate  location  upon  which 
the  curves  are  all  run  in.  In  a  difficult  country  it  maybe 
run  over  a  third  or  fourth  time,  while  in  an  easy  country 
the  prehminary  may  be  all  is  wanted.  After  the  railway 
line  has  been  finally  located,  the  next  duty  of  the 
engineer  is  to  prepare  the  work  for  letting,  or  the  actual 
"construction"  of  the  road.  A  "specification"  is  first 
to  be  prepared,  containing  an  exact  and  minute  descrip- 
tion of  the  manner  of  executing  the  work  in  all  its 
details. 

Copies  of  it,  with  maps,  profiles  and  drawings  of  the 
proposed  road,  etc.,  are  to  be  submitted  to  the  inspection 
of  the  persons  desiring  to  undertake  it,  \\ho  are  to  be 
invited  by  advertisement  to  hand  it  sealed  tenders  of  the 
prices  per  cubic  yard  (or  other  unit  of  m.easurement)  at 
•  which  they  will  agree  to  perform  the  work. 

The  proposals  are  opened  on  the  appointed  day,  and 
the  lowest  are  accepted,  other  things  being  equal.  The 
"  contract,"  which  is  to  be  then  signed  by  the  parties, 
should  contain  copious  and  stringent  conditions  as  to  the 


2; 


time  and  manner  of  performing  the  work;  stipulating 
when  it  is  to  be  commenced,  how  rapidly  to  progress"  in 
what  order  of  parts,  and  when  to  be  completed,  which  of 
the  incidental  expenses  are  to  be  borne  by  the  contractor, 
and  for  which  he  is  to  be  remunerated.  The  specification 
is  considered  to  form  part  of  the  contract,  and  a  "bond" 
is  appended,  by  which  the  contractor  and  his  securities 
are"holden  and  firmly  bound"  in  a  penal  sum,  "this 
bond  to  be  null  and  void  if  the  said  parties  shall  faith- 
fully execute  and  fulfill  the  accompanying  contract. 

Each  contract  should  include  such  a  length  of  road, 
called  "a  section"  (usually  a  half  a  mile  or  a  mile  long, 
or  even  a  greater  distance).  There  should  be  separate 
contracts  for  the  mechanical  structures  required.  The 
works  which  will  need  most  time  for  their  execution 
should  be  commenced  first ;  but  no  contract  should  be 
let  till  the  land  which  it  includes  is  secured,  or  exorbi- 
tant demands  will  be  made. 

The  forming  of  the  road-bed  is  our  next  thought  for 
consideration.  The  grading  of  a  line  embraces  all  work 
required  to  bring  the  surface  of  the  ground  to  the  grade 
line,  and  is  mostly  earthwork,  and  for  a  limited  extent 
of  the  line  it  is  rock  work,  "  which  is  the  founda- 
tion and  support  of  the  whole  superstructure."  This 
work  prepares  the  bed  for  the  superstructure,  and  when 
the  earth  is  not  composed  of  sufficiently  hard  gravel  it  is 
excavated  to  a  proper  depth,  so  as  to  give  space  for  the 
ballast.  An  important  feature  connected  with  this  line  of 
work  is  the  drainage,  and  a  thorough  attention  to  this  is 
essential  to  a  good  railway. 

In  soils  through  which  the  water  percolates  freely,  as 
course  gravel  and  sand,  the  drainage  may  be  so  well  pro- 
vided for,  as  to  require  little  attention,  but  most  soils  are 


28 

too  retentive  for  this  and  drains  are  to  be  so  made  as  to 
take  tlie  water  off  quickly  to  some  natural  or  artificial 
channels  which  will  carry  it  beyond  the  reach  of  influ- 
ence of  the  road-bed,  because  water  standing  at  or  near 
the  road-bed  will  soften  the  foundation  and  allow  the 
ballast  to  settle  and  thus  derange  the  superstructure. 
The  road-bed  or  foundation  of  the  ballast  should  be  so 
constructed  as  to  give  support,  and  be  to  the  require- 
ments of  the  traffic  to  be  hauled. 

It  is  also  necessary  to  provide  for  the  passage  of  water, 
by  natural  streams  or  artificial  channels,  which  flows 
across  the  railway.  In  order  to  accomplish  this,  bridges 
and  culverts  are  constructed.  The  term  culvert  is  used 
for  work  on  small  streams  and  bridcres  for  larcre  ones, 
and  the  building  of  the  same  depends  entirely  upon  the 
condition  of  the  body  of  water  and  its  tributaries.  The 
"ballasting"  of  the  track,  and  in  this  connection  there 
are  two  characteristics  to  be  considered,  namely :  First — 
A  material  that  by  its  open  porous  character  will  allow 
falling  water  to  pass  quickly  and  prevent  heaving  by  frost. 
Second — By  its  hardness  and  firmness  in  all  states  of 
weather  to  sustain  the  action  of  trains,  so  as  to  prevent 
as  much  as  possible  tlie  derangement  of  the  track.  If  these 
conditions  are  secured  all  requirements  will  essentially 
be  provided  for  so  far  as  the  ballast  depends.  The  best 
material  for  ballast  is  clean  gravel  and  sand.  Broken  stone 
is  very  good  and  makes  the  most  durable  ballast,  but  has 
the  least  tendency  to  make  dust,  and  is  not  at  all  times 
favorable  toward  'the  durability  of  the  rail  or  rolling 
equipment,  and  in  selecting  broken  stone  for  ballast  a 
rather  hard,  silicious  kind  is  better  than  a  more  solid  and 
unyielding  quality,  as  it  favors  the  elasticity  desirable  in  a 
rail  track. 


29 

The  "  cross-slcepers,  "  upon  which  the  rails  are  placed, 
are  usually  of  chestnut,  oak,  pitch-pine,  or  red  cedar. 
They  are  hewn  on  both  sides,  allowing  about  six  inches 
of  material  for  the  thickness,  and  more  if  possible.  The 
longer  they  are  the  better,  as  the  extra  length  on  each 
side  of  the  track  lessens  the  danger  of  settling.  The 
rails  which  are  also  a  very  important  factor  to  be  con- 
sidered, should  be  to  the  requirements  of  the  traffic  to  be 
hauled.  If  the  traffic  is  light  much  can  be  saved  by  placing 
a  light  rail  down,  but  if  the  traffic  is  of  a  heavy  character 
a  heavy  rail  will  be  more  profitable  and  durable.  The 
rails  may  be  directly  fastened  to  their  supports,  and  also 
have  their  ends  held  by  "  chairs,"  spiked  to  the  blocks 
or  cross-sleepers.  The  chairs  are  generally  cast-iron, 
and  weigh  from  twenty  to  thirty  pounds.  They  are  cast 
in  one  piece,  consisting  of  a  bottom  plate,  and  two  side 
pieces,  between  which  the  rails  pass,  its  under  surface 
being  about  an  inch  above  the  block.  The  opening  of 
the  chair  must  be  as  wide  as  the  lower  part  of  the  rail, 
in  order  that  it  maybe  removed  and  replaced  without  dis- 
turbing the  chair.  A  key  of  wood  or  iron  is  used  to  fill  up 
the  openings  which  are  made  in  between  the  joints,  and 
to  hold  the  rail  firmly  in  the  chair,  but  without  offering 
any  resistance  to  its  longitudinal  motion  in  expansion  and 
contraction.  The  force  with  which  iron  expands  is  from 
si.x  to  nine  tons  per  square  inch  of  section,  which  corre- 
sponds to  ten  pounds  to  the  yard,  so  that  a  rail  of  sev- 
enty pounds  expands  with  a  force  of  about  fifty  tons. 


RAILWAY  MANAGEMENT. 


It  would  be  impossible  to  give  a  complete  account  of 
the  organization,  distribution  of  duties,  systems  of  work- 
ing and  checks  in  the  various  departments,  and  to  de- 
scribe technically  the  variations  of  practice  in  the  differ- 
ent sections,  and  on  different  roads,  for  the  reason  of  the 
difference  in  opinions  of  the  officers  in  charge.  Consid- 
ering this  fact,  let  us  only  look  at  the  essential  feature  of 
a  good  management.  No  matter  how  small  or  large  the 
company  may  be,  there  are  certain  and  important  duties 
requisite  to  a  good  management,  and  they  may  be  classi- 
fied as  follows : 

1.  The  physical  care  of  the  property, 

2.  The  handling  of  trains  and  moving  of  freight  and 
passengers. 

3.  Accounting  and  the  collection  of  revenue. 

4.  Making  of  rates  and  soliciting  business. 

5.  The  custody  and  disbursement  of  revenue. 

The  president  is  of  course  the  executive  head  of  the 
company,  but  in  important  matters  he  acts  only  with  the 
consent  and  approval  of  the  board  of  directors  or  an 
executive  committee,  clothed  with  authority  of  the  board 
which  may  be  called  the  legislative  branch  of  the  man- 
agement. The  president's  duty  is  of  a  dissimilar  char- 
acter, the  variations  in  the  scope  of  the  labors  actually 
performed  by  the  railway  presidents  of  the  United  States 
have  beed  accompanied  with  and  perhaps  partly  caused 
by  noticeable  differences  in  their  individual  characters, 
acquirements  and  antecedents.     In  a  general  manner  the 

30 


31 

tendency  in  recent  years  has  been  strongly  inclined 
toward  a  requirement  that  they  should  possess  an  exten- 
sive railway  experience.  In  many  instances  it  was  ac- 
quired in  various  branches  of  railway  affairs,  the  prelimi- 
nary labors  being  either  in  legal  profession,  engineering, 
construction,  or  operating  department.  The  selections  of 
presidents  to-day  have  been  made  chiefly  on  account  of 
the  favorable  influence  they  could  presumably  exercise 
either  in  commercial,  banking  or  investing  circles,  with 
very  little  regard  to  their  actual  knowledge  of  the  compli- 
cated details  of  the  railway  movements.  Others  have 
virtually  elected  themselves  by  their  control  of  stock  or 
influence  with  stock-holders ;  and  again  others  have  been 
selected  as  president  solely  on  account  of  skill  displayed 
in  the  management  of  one  or  more  branches  of  practical 
railway  affairs  and  possession  of  recognized  executive 
ability.  The  office  is  one  of  great  importance,  and  the 
stock-holders  of  different  companies  have  acted  in  some 
instances  on  the  theory  that  they  neither  desired  nor  ex- 
pected the  president  to  be  the  active  head  of  all  depart- 
ments, looking  to  him  chiefly  as  a  financial  leader;  while 
in  many  other  cases  presidents  have  been  chosen  in  the 
expectation  that  they  would  exercise  intelligent  supervi- 
sion over  all  classes  of  operation.  Whatever  the  antece- 
dent training  or  acquirements  of  a  railway  president  may 
be,  he  can  usually,  if  he  chooses,  exercise  a  positive  in- 
fluence over  all  the  affairs  of  his  own  company  and 
materially  affect  sundry  other  companies  with  which  it 
connects  or  competes,  so  that  his  characteristics  may  be  a 
matter  of  considerable  consequence.  There  is  perhaps 
no  single  class  of  men  who  have  left  a  deeper  impression 
upon  the  transportation  systems  of  the  United  States  than 
railway  presidents. 


32 

Every  company  has  a  board  of  directors  or  a  board  of 
managers.  The  latter  title  is  adopted  in  few  instances, 
and,  perhaps,  represents  more  correctly  than  the  former, 
the  functions  theoretically  exercised,  as  they  include 
action  on  every  important  new  proceeding, — the  declara- 
tion of  dividends,  the  issue  of  new  securities,  either  the 
appointment  of  important  officials,  including  the  presi- 
dent, or  the  ratification  of  important  appointments  made 
by  the  president  or  high  officials,  the  construction  of 
new  lines  or  other  work  of  consequence.  Their  nominal 
position  is  somewhat  analogous  to  that  of  a  legislative 
body  of  a  political  government,  as  they  are  always  elected 
by  the  share-holders  and  are  supposed  to  act  as  their  im- 
mediate representatives.  The  extent  to  which  boards  of 
directors  or  managers  do  manage  railway  operations  or 
control  the  policy  and  movements  of  great  lines  varies 
materially,  and  the  actual  state  of  affairs  differs  widely  in 
different  companies.  The  executive  power  and  super- 
vision of  the  president  may  be  delegated  to  one  or  more 
vice-presidents,  excepting  everything  that  relates  to  finan- 
cial matters,  but,  as  their  functions  are  merely  subdi- 
visions of  those  of  the  president,  they  have  no  part  in  a 
general  scheme  of  authority. 

The  first  four  of  the  subdivisions  of  duties  indicated 
above  are  usually  confined  to  a  general  manager  who 
may  also  be  a  vice-president,  and  the  last  is  in  charge  of 
a  treasurer  -  reporting  directly  to  the  president.  The 
power  and  supervision  of  the  general  manager  may  be 
delegated  to  the  following,  namely  : 

1.  A  superintendent  of  roadway,  having  charge  of  the 
track  and  keeping  the  right  of  way  in  good  condition. 

2.  A  superintendent  of  transportation,  who  has  charge 
of  the  handling  of  trains,  the  keeping  a  record  of  the  lo- 


33 

cation  and  whereabouts  and  movements  of  all  cars,  and 
the  preparation  of  the  train  schedule. 

3.  A  superintendent  of  machinery,  who  has  charge  of 
the  construction  and  maintenance  of  all  rolling  stock,  and 
is  assisted  by  a  master  car  builder,  who  looks  after  the  re- 
pairs to  all  cars,  and  the  inspection  thereof  along  the  line 
of  the  road. 

4.  A  traffic  manager,  or  a  general  freight  and  pas- 
senger agent,  who  has  charge  of  the  making  of  rates,  ad- 
vertising and  soliciting  for  business,  and  the  adjusting 
of  claims  arising  from  overcharge  or  loss  and  damage  to 
property. 

5.  A  comptroller,  who  has  charge  of  all  the  book-keep- 
ing by  which  the  revenue  and  disbursements  of  the  com- 
pany are  accounted  for. 

6.  A  paymaster  receives  money  from  the  treasurer 
and  disburses  it  under  the  direction  of  the  comptroller 
for  all  expenses  of  operation. 

Besides  these  already  mentioned  there  are  the  legal 
and  purchase  departments.  The  legal  department  is  in 
charge  of  a  lawyer  or  in  other  words  a  solicitor.  He 
looks  after  all  claims  for  loss  or  injury  to  persons  and 
property,  the  preparation  of  contracts  and  agreements, 
which  should  always  pass  under  the  scrutiny  of  a  counsel. 
The  verification  of  all  forms  of  bonds,  mortgages,  deben- 
tures and  stock  certificates  should  also  be  made  by  the 
counsel. 

The  purchasing  department  is  in  charge  of  a  purchas- 
ing agent.  His  position  is  a  very  important  one;  he  buys 
and  sells  all  the  material  and  supplies  and  stationery  for 
the  company;  he  is  assisted  by  what  are  commonly 
called  "store-keepers,"  who  are  stationed  at  various 
points  and  disburse  the  supplies  when  a  requisition  is 
made  for  the  same. 


34 

Having  given  an  idea  of  the  management  and  the  prin- 
cipal features  of  each  department,  let  us  turn  our  attention 
to  the  diagram  on  page  35,  showing  the  skeleton  of  a 
railroad  organization  and  line  of  responsibility. 

Handling  of  trains,  which  is  one  of  the  many  features 
of  the  operating  department,  comes  under  the  direction 
of  a  superintendent,  and  is  called  conducting  transpor- 
tation, in  charge  of  a  superintendent.  The  duties  of  a 
superintendent  are  by  no  means  limited  or  easy;  he  has 
perhaps  as  great  a  variety  of  occupations,  and  as  many 
different  questions  of  importance  depending  upon  him  as 
any  business  or  professional  man  in  the  country. 

Fully  one-half  of  his  time  is  devoted  out  of  doors, 
looking  after  the  physical  condition  of  the  road.  He  must 
be  familiar  with  every  foot  of  his  track  and  in  cases  of 
emergency  must  know  what  course  to  pursue  for  imme- 
diate remedy.  All  train  hands,  train  masters,  train 
despatchers,  telegraph  operators,  and  station  forces 
come  under  his  immediate  supervision,  and  must  furnish 
all  regular  and  irregular  service,  when  the  traflic  de- 
partment requires  it.  The  time-table  or  schedule  is 
.the  general  law  governing  the  arriving  and  leaving  time 
of  all  regular  trains  at  all  stations.  They  are  issued  from 
time  to  time,  as  the  case  may  require,  and  from  the 
moment  the  new  one  takes  effect,  any  and  all  preceding 
tables  are  superseded  by  the  one  issued,  as  well  as  all  in- 
structions "special"  relating  thereto.  The  regular 
meeting  or  passing  points  for  trains  on  the  road,  are  in- 
dicated on  the  time  table  in  full-faced  type,  as  well  as  the 
arriving  and  leaving  time  of  a  train,  when  both  are  meet- 
ing or  passing  trains,  or  when  one  or  more  other  trains 
are  to  meet  or  pass  it  between  those  times.     In  preparing 


35 


I  Comptroller  {  ^^^'-'ors  of  Receipts  and  Disbursement 


r'urchaMug  Agent 


Storekeeper. 


a 
w 
o 


'A 

C 


E-i  U) 


Supt 


« 


< 


Supt.  of 


Machinery 


r 


r  r^eceiving  Clerk 

Shil)piDg  Clerk 

J-oading  Clerk 

Discharging  CJerk 
I   Collectors 
I   Laborers 

I  V     ,  f   P!"'', ^^"ii'neers 

Yard  Master   J     Switchman 
I  j     Conductors 

irain  Dcspatchers 

Operators  of  the  Telegraph 
I  ^  >  Conductors  and  Brakemen 

A     ^"'  /Sr"'^''^'"^^"^«^^'Sn  and  focal" 

Accountant    1   ^^'Jeage     "  '^  i-ucai 

(.  Lost  Car.  and  Tracing  Clerks 

^^remanMch.Shop|S:S^:^^^^:;r 
Ulechanies  and  Laborers 
Foreman  Car  Shops  /  Grea^erT'  "°^  "^"^"'"^ 
(  Car  Inspectors 


Station 
Agent 


Train  Master 


H 


Supt.  of    j 


Road 


Roadway  j     Master 


I      Sujit.  of     f  I^'iclge  Foreman 

I      Bridges    j   Watchman 

I  Ma.son  and  Carpenter  Gane 
I  Section  Foreman.  ^ 

Qiinf    „r        I     Ganor    nnri    T^ 1      T.T    .. 


Supt.  of 
Road. 


CO 


Gang  and  Track  Walkers 
Wood  and  Water  Tenders 
Floating  Gang  Constructing 
'n  Iransit. 


Traflic 
Manager 


General 
Freight  Agent  . 


General 


Division  Freijh,  Agems 

Tariff  Clerks 


Freight      f  I^egister  Clerk 

Claim        J  ,^"^«tigating  Clerk 
Agent  Voucher  Clerl 

ivision  pJl^J'^^  ^Sem 


Claim 

_ „.  ?'^-on  Fass^enTeT^Uf "' 

Passenger  Agt.  ^   Rati  cS^'"'"^'^  ^S"' 
I   -Aijportionment  Clerk 
I  Advertising  Agent 


36 

a  time-table,  our  first  step  in  that  direction  would  be  to 
obtain  from  the  engineer  in  charge  a  chart  showing  the 
miles  of  the  road,  and  the  distance  between  stations, 
with  a  scale,  then  secure  a  sheet  of  paper  that  would  be 
sufficiently  large  to  contain  the  diagram.  After  the 
stations  are  divided  off  by  proportional  horizontal 
lines,  as  per  the  scale,  divide  the  sheet  into  twenty- 
four  equal  spaces  of  one  inch  width,  which  repre- 
sents the  twenty-four  hours  of  the  day ;  these  spaces  are 
again  divided  into  twelve  equal  spaces  representing  the 
minutes  of  the  hour,  by  vertical  lines.  The  course,  of 
every  train  can  now  be  plotted  thereon,  and  the  time  that 
each  train  will  arrive  at  any  station  can  be  ascertained  by 
drawing  or  extending  a  line  obliquely  across  the  sheet, 
the  intersecting  point  being  the  time  due  at  that  point,  as 
for  example: — 

A  Passenger  Train,  No.  i,  leaves  station  A  at  midnight  and  arriving 
at  R  at  6.40  A.  M. 

An  Express  Train,  No.  2,  leaves  station  R  at  midnight  and  arriving 
at  A  at  5.35  A.  M, 

No.  7,  which  is  a  freight,  leaves  station  A  at  I  A.  M.,  runs  to  G  by 
3.10  A.  M.  remains  there  until  3.35  A.  M.  to  allow  No.  5  to  pass  and 
arrives  at  R  10.50  A.  M. 

No.  5,  Local  Passenger,  leaves  station  A  at  1.30  A.  M.;  runs  to 
station  K  by  4.42  A.  M.  and  raturns  to  A  by  9  A.  M,  being  called  No.  4 
on  the  return. 

No.  3,  Freight,  leaves  station  A  at  4  A.  M.,  arriving  at  R.  at 
11.50  A.  M. 

No.  9,  Local  Passenger,  leaves  station  A  6.50  A.  M.,  arriving  at  J 
10.20  A.  M. 

No.  6,  Local  Passenger,  leaves  station  R  5  A.  M.,  runs  to  K  by 
8  A.  M.,  remains  there  until  8.30  and  arrives  at  station  A  12  noon. 

The  diagram  shows  at  a  glance  how,  when  and  where  every  train  is  at 
any  moment  and  at  what  points  they  should  meet  and  pass. 


37 


3S 

Even  numbers  are  generally  assigned  to  trains  of  one 
direction  and  uneven  numbers  given  to  those  of  the 
opposite  direction.  Trains  are  classified  according  to 
their  superiority  and  right  to  the  track,  namely :  First- 
class  trains  (passenger  trains)  have  the  superiority  over 
any  succeeding  classes.  Second-class  trains  (mixed 
trains)  have  the  superiority  over  any  succeeding  classes. 
Third-class  trains  (freight  trains)  have  the  superior  right 
over  any  succeeding  classes,  and  so  on.  Extra  trains 
are  those  not  represented  on  the  time  table,  and  are  run 
without  notice  and  have  no  superiority  over  any  class  but 
of  an  inferior  character.  If  all  trains  could  be  run  ac- 
cording to  the  time  as  shown  on  the  time-table,  very  little 
trouble  would  present  itself,  but,  when  irregular  service 
is  put  on  the  road  (extra  trains)  the  trouble  begins,  and 
of  necessity  requires  the  use  of  the  telegraph.  Telegraphic 
orders  are  usually  written  on  a  prescribed  form  for  that 
purpose,  and  when  issued  every  one  contains  the  same 
wording  so  that  each  person  receiving  them  will  have  a 
duplicate  of  what  is  given  to  the  other. 

These  orders  simply  contain  one  special  movement,  or 
at  least  should  not  contain  any  more  than  the  one  to 
which  it  has  reference. 

When  they  are  addressed  for  a  train,  a  copy  must  be 
given  to  engineman,  conductor,  and  the  pilot,  should  there 
be  one.  Train  orders  are  of  various  forms  and  significa- 
tions, and  too  numerous  to  invade  this  chapter. 

The  signal,  which  takes  an  important  part  in  the  move- 
ment of  trains,  is  the  only  means  of  communication. 
They  have  many  significations,  too  many  however  to 
mention  in  this  article,  but  in  order  to  make  the  subject 
plausible,  will  mention  some  few  of  them,  namely: 

Red  signifies  danger,  and  is  a  signal  to  stop. 


39 

Green  signifies  caution,  and  is  a  signal  to  go  slowly. 

White  signifies  safety,  and  is  a  signal  to  go  on. 

Green  and  white  is  a  signal  to  be  used  to  stop  trains  at 
flag  stations  for  passengers  or  freight. 

Blue  is  a  signal  to  be  used  by  car  inspectors. 

An  explosive  cap  or  torpedo,  placed  on  the  top  of  the 
rail,  is  a  signal  to  be  used  in  addition  to  the  regular 
signals. 

The  explosion  of  one  torpedo  is  a  signal  to  stop,  two 
torpedoes  is  a  signal  to  reduce  speed  immediately,  and 
look  out  for  a  danger  signal,  and  when  a  fuse  is  burning 
on  the  track  all  trains  must  stop,  and  not  proceed  until  it 
is  burnt  out. 

A  lamp  swung  across  the  track  is  signal  to  stop. 

A  lamp  swung  vertically  in  a  circle  across  the  track 
when  the  train  is  standing,  is  the  signal  to  move  back. 

A  lamp  raised  and  lowered  vertically,  is  a  signal  to 
move  ahead. 

A  lamp  swung  vertically  in  a  circle  at  arms  length 
across  the  track  when  the  train  is  running,  is  the  signal 
that  the  train  has  parted. 

Train  rules  governing  the  movement  of  trains  are 
very  simple  and  would  be  all  that  is  requisite,  if  all  trains 
could  always  be  kept  exactly  on  time.  But  as  this 
cannot  at  all  times  be  done,  certain  provisions  are  made 
to  overcome  all  the  complication  which  may  arise  there- 
from. 

The  first  and  most  important  rule  is,  that  no  train 
must  ever,  under  any  circumstances,  run  ahead  of  its 
schedule  time,  that  is,  the  time  appearing  on  the  time-table. 

The  second  is,  that  any  train  making  a  stop  not  on  its 
schedule,  must  immediately  send  out  flagmen  with  red 
flags,  lights,  and  torpedoes,  to  protect  it,  sometimes  at  a  dis- 


40 

tance  of  six  hundred  yards  or  twelve  telegraph  poles,  and 
again  at  a  distance  of  twelve  hundred  yards  or  twenty- 
four  telegraph  poles.  This  is  a  very  important  one,  and 
it  is  a  difficult  matter  for  the  officials  to  impress  the 
importance  of  it  upon  the  minds  of  the  train  hands. 

It  is  essential  to  make  some  requirements,  when  a  train 
is  prevented  from  arriving  on  time  at  its  meeting  or  pass- 
ing, by  which  the  opposing  train  may  proceed,  or  business 
will  be  suspended.  As  space  will  not  permit  a  full  de- 
scription of  these  principles,  only  the  general  principles 
of  these  rules  will  be  given,  namely : — 

First. — All  trains  of  inferior  class  must  keep  out  of  the 
way  of  a  train  of  a  superior  class  ;  that  is,  all  freight 
trains  or  extras  must  wait  indefinitely,  and  must  keep 
out  of  the  way  of  all  passenger  trains. 

Second. — When  one  train  only  is  behind  time,  the  op- 
posing train  of  the  same  class  will  wait  for  it  a  special 
time  usually  ten  minutes,  and  five  minutes  for  possible 
variation  of  watches,  then  go  ahead  keeping  fifteen 
minutes  behind  its  schedule. 

Third. — But  should  such  a  train,  running  on  delayed 
time,  loose  more  time,  or  in  any  other  wayj  should  both 
trains  get  behind  time,  then  the  one  which  is  bound  in  a 
certain  direction,  for  instance  north,  has  the  right  to  the 
track,  and  the  other  must  lie  by  indefinitely. 

Still  there  is  another  safe-guard  in  the  handling  of 
trains  where  they  become  very  numerous,  and  this  is 
multiplying  telegraph  stations  at  short  intervals,  and 
giving  them  conspicuous  signals  of  semaphone  arms  and 
lanterns,  until  the  whole  road  is  divided  into  a  number  of 
so  called  blocks  of  a  few  miles  each.  No  train  is  per- 
mitted to  enter  any  block  until  the  preceding  train  has 
passed  through  or  out. 


41 

In  the  approaches  to  some  of  our  great  depots,  where 
trains  and  tracks  are  muUiplicd  and  confused  with  cross- 
overs and  switching  s^ervice,  signal  towers  are  built  and 
all  the  switches  are  set,  and  all  movements  are  controlled 
from  them. 

They  are  sometimes  operated  by  electricity,  and 
others  by  compressed  air. 

Having  given  some  facts  pertaining  to  the  handling  of 
trains,  the  preparation  of  the  time-table,  signals,  etc.,  let 
us  repair  to  motive  power  department,  which  is  under 
the  direction  of  a  superintendent  of  motive  power.  This 
department  is  divided  into  two  branches,  in  charge  of  a 
master  mechanic  and  a  master  car  builder. 

The  Master  Mechanic  has  direct  charge  over  all  en- 
gines and  the  repairs  thereto ;  enginemen  and  firemen  also 
come  under  his  supervision.  He  keeps  a  record  of  all 
material  and  supplies  furnished  and  consumed,  the 
number  of  miles  run  and  cars  hauled  by  each  engine, 
which  is  placed  on  a  performance  sheet.  At  the  end  of 
every  month  he  is  required  to  make  up  a  report  or 
balance  sheet,  which  gives  a  complete  account  of  all 
material  received  and  disbursed,  with  a  detailed  account 
of  the  charc^ings  to  the  accounts  receiving  the  benefit. 

The  Master  Car  Builder  has  charge  of  all  repair 
shops  where  cars  are  repaired  and  erected.  Under  him 
are  inspectors  who  are  located  at  various  points,  and  at 
junctions,  for  the  purpose  of  inspecting  cars.  When 
these  inspectors  locate  a  defect  in  any  portion  of  the  car, 
they  attach  what  is  called  a  defect  card,  and  if  unsafe  to 
run  is  not  accepted  ;  but  where  the  defect  does  not  render 
the  car  unsafe  to  run,  or  unsafe  to  train-men,  is  generally 
accepted.  In  such  circumstances,  every  company  to 
which  the  car  is  offered  may  require  that  a  defect  card  be 


42 

securely  attached  to  the  car,  and  when  any  company, 
finding  a  car  with  a  defect  card  attached,  may  make  the 
repairs  noted  by  the  card,  provided  such  repairs  are 
necessary  for  the  safe  running  of  the  car,  at  the  same 
time  rendering  a  bill  for  the  same  to  the  company  attach- 
ing the  card,  stating  upon  the  bill  the  date  and  place 
when  the  repairs  were  made,  the  card  to  accompany  the 
bill  as  a  voucher  for  the  work  done.  A  defect  card 
which  is  generally  used  is  as  follows : 


M.  C.  B.  DEFECT  CARD. 
(Name  of  Road.) 

Car  No Date 

Initial Hne. 

Will  be  received  at  any  point  on  this  company's  line,  with 
the  following  defects : 


Inspector  at 


The  Car  Accountant  and  his  duties  are  of  as  much  im- 
portance as  any  other  officer  of  the  operating  department. 
He  furnishes  valuable  information  regarding  the  move- 
ment of  all  cars,  either  on  home  or  on  foreign  roads,  and 
his  office  may  be  properly  divided  into  main  branches, 
namely:  Mileage  and  Record.  The  computation  of 
mileage  is  made  in  most  cases  directly  from  the  reports 
of  each  train,  which  are  made  out  by  the  train  conductor. 


43 

These  reports  give  the  initial  and  number  of  each  car 
in  a  train,  whether  loaded  or  empty,  and  the  station 
whence  taken  and  where  left.  To  facilitate  the  compu- 
tation of  mileage  of  each  car,  the  stations  on  the  road 
are  consecutively  numbered,  beginning  at  nought,  and 
each  succeeding  station  being  represented  by  a  number 
equivalent  to  the  number  of  miles  it  is  distant  from  the 
initial  station,  excepting,  at  divisional  and  terminal 
stations,  which  are  generally  given  a  letter  in  order  to  re- 
duce the  work  of  recording. 

The  conductor  in  making  his  report  shows  the  stations 
between  which  each  car  moves,  by  their  number  or  letter, 
so  all  that  is  necessary  for  the  mileage  clerk  to  do  is  to 
take  the  difference  between  station  numbers,  in  each  case, 
an^  he  has  the  miles  the  car  travelled.  The  mileage  of 
every  car  on  these  reports  is  condensed  and  recorded 
into  a  ledger,  and  at  the  end  of  every  month  they  are 
footed,  showing  the  total  mileage  of  all  cars  owned  by 
the  home  company,  and  those  owned  by  a  foreign  road. 

At  the  close  of  every  month  each  road  renders  the 
other  a  report  showing  the  amount  of  mileage  due  them 
for  that  month  of  cars  which  were  on  the  road  within 
that  month. 

The  Record  Branch  is  of  equal  importance,  where 
a  broad  and  complete  record  is  kept  of  the  daily 
movement  of  every  car  upon  the  road  either  local  or 
foreign.  The  records  are  divided  between  local  and 
foreip-n.  Local  records  are  books  used  for  home  cars, 
and  are  of  a  large  size,  ruled  in  such  a  manner  as  to 
allow  space  for  the  daily  movement  or  location  of  each 
car  for  one  month.  Foreign  records  are  similarly  ruled, 
but  a  slight  change  being  necessary  to  allow  the  number 
and  initials  of  the  foreign  cars,  which  could  not  be  very 


44 

well  provided  for  in  advance.  When  conductors'  reports 
are  received  they  are  distributed  amongst  the  record 
clerks,  who  record  the  movement  of  certain  initials,  or 
scries  of  numbers,  under  the  date  shown  by  the  report ; 
the  report  being  handed  from  one  to  another  until  every 
car  has  been  entered  and  the  reports  checked.     Reports 


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are  also  received  from  junction  stations  daily,  showing 
all  cars  received  from  or  delivered  to  connecting  roads, 
whether  loaded  or  empty,  and  the  destination  of  each. 
Station  agents  also  forward  reports  showing  cars  received 
and  forwarded  from  their  station  from  mid-night  to  mid- 
night, remaining  on  hand  loaded  or  empty,  and  if  loaded, 
contents  and  consignee,  and  also  cars  in  process  of  load- 


45 

ing  or  unloading.  Reports  are  also  received  from  shops 
and  yards,  showing  cars  undergoing  repairs  or  waiting 
for  the  same.  It  is  plainly  to  be  seen  that  the  car  ac- 
countant endeavors  to  get  a  complete  record  showing 
every  car  that  may  be  either  in  use  or  standing  at  any 
point  on  the  line.  The  diagram  on  page  44  illustrates  a 
foreign  record  page,  and  the  process  of  recording. 

EXPLANATION  OF   DIAGRAM. 

Each  connecting  line  at  each  junction  station  is  assigned  a  number. 
When  a  car  is  received  from  a  connection,  the  record  is  shown  by  entering 
the  road  number  in  the  upper  space  of  the  block  under  the  proper  date, 
followed  by  the  character  X  if  loaded  or  empty,  together  with  the  time. 
As  for  example,  car  24710,  is  shown  as  being  transferred  from  station 
217,  11.30  and  to  have  been  received  11.25  from  Pennsylvania  Railroad, 
at  Cayuga,  (15).  An  entry  in  the  lower  space  of  the  block  indicates  a 
delivery  to  connecting  line  Wayne  &  Amboy  Railroad  (  20  )  at  8  o'clock 
A.  M.  The  middle  space  of  the  block  is  used  for  the  car  movement,  the 
first  number  or  letter  showing  the  station  from  which  the  car  moved.  The 
character  X  when  a  prefi-x  to  a  station  number,  indicates  that  the  car  is  being 

loaded  at  that  station.     The  character when  used  as  a  prefix,  shows 

that  the  car  is  being  unloaded  ;  and  as  an  affix,  it  indicates  a  movement 
empty,  or  on  hand  empty,  and  when  used  under  a  station  number,  it  indi- 
cates a  change  date  record,  that  is,  leaving  a  station  on  one  date,  and 
arriving  at  another  on  the  following  date.  Station  numbers  or  letters  with- 
out other  characters,  show  that  the  car  is  loaded. 

Sign  B  is  used  when  the  car  is  left  at  a  station  for  repairs  while  in 
transit. 

Sign  T,  lading  transferred  to  another  car,  a  transfer  record  being  kept 
showing  to  what  car  transferred. 

Sign  R,  on  hand  at  station,  or  yard  for  repairs.  Shops  are  assigned 
numbers  with  an  O  prefixed.  The  upper  and  lower  spaces  being  used  to 
show  delivery  to  or  received  from  the  shop,  similar  to  the  interchanging 
record  with  connection. 

For  convenience  the  24  hour  system  is  used  in  recording  time,  and  is 
shown  in  quarter  hours,  thus  iqI,  12I,  iS^,  and  21^,  or  12.25,18.30, 
or  21.45.  The  transfer  column  shows  the  station  at  which  the  cars  were 
reported  on  the  last  day  of  the  previous  month,  and  the  date,  also  from 
what  road  received,  with  date, 


46 

Wc  have  now  come  to  the  Road-way  Department, 
which  is  in  charge  of  a  civil  engineer,  whose  duty  is  to 
look  after  the  betterments  of  the  road  bed  and  right  of 
way.  All  new  construction  comes  under  his  personal 
supervision,  and  he  will  have  to  pass  his  judgment  upon 
the  purchasing  of  additional  property,  and  the  prepara- 
tion for  letting  of  contracts  for  new  construction.  Under 
him  comes  supervisors,  whose  duty  is  to  keep  the  road- 
bed in  the  best  possible  condition,  sustaining  the  physical 
condition  of  the  track  for  the  safe  handling  of  trains. 
All  section  men  and  laborers  come  under  their  direct 
charge ;  it  is  also  their  duty  to  keep  a  correct  and  accu- 
rate account  of  the  time  of  each  man,  and  the  material 
received  and  disbursed,  making  a  report  at  the  end  of 
every  month  in  a  detailed  manner. 


FREIGHT  RATE  CONSTRUCTION. 


Before  taking  up  the  various  special  topics,  to  which 
this  article  is  devoted,  it  is  deemed  suitable  to  submit 
some  of  the  general  observations  bearing  upon  the  scope 
and  the  peculiar  office  of  common  carrier,  and  the  in- 
creasing dependence  of  every  occupation  upon  their 
facilities.  Commerce  reaches  its  destination  by  the  most 
advantageous  route.  Trade  seeks  the  easiest  path  from 
the  producer  to  the  consumer.  The  right  of  every  person 
to  just  and  equal  treatment  in  all  that  pertains  to  public 
transportation  is  practically  unquestioned.  To  secure 
the  actual  enjoyment  of  this  right,  to  insure  fairness  and 
impartiality  in  the  conduct  and  charges  of  public  carriers, 
is  the  paramount  purpose  of  all  regulative  enactments  of 
the  law  governing  interstate  commerce.  It  is  hoped 
that  in  a  short  time  every  shipper  can  and  will  enjoy  a 
greater  amount  of  privileges,  and  that  the  carrier  will  be 
equally  remunerated. 

The  rates  of  railways  are  governed  absolutely  by  the 
same  law  which  controls  the  ruling  price  of  other  neces- 
saries of  life. 

The  question  may  be  asked,  what  is  a  reasonable  rate  ? 
This  is  a  difficult  question  to  solve,  simply  due  to  the 
reason  that  what  may  be  a  reasonable  rate  in  one  section 
of  the  country,  may  not  be  in  another.  The  question 
alone  is  purely  a  local  one,  and  cannot  be  generalized  or 
made  to  fit  any  particular  formula,  because  it  is  a  practical 
and  not,  as  some  writers  infer,  a  theoretical  question.  The 
rate  making  power  of  a  railroad  company  is  an  adaptive 

47 


48 

one.  It  must  take  into  consideration  the  producer,  middle- 
man and  the  consumer,  as  well  as  the  carrier.  All  rates 
must  conform  to  the  market  competitive  influences  of 
other  carriers,  and  it  is  only  in  isolated  countries  and  in 
petty  cases  that  the  rate  maker  exercises  any  discretion 
whatever.  The  commercial  and  industrial  forces  arc  so 
interwoven  throughout  the  whole  country,  and  compete 
so  actively  with  each  other,  that  they  effect  the  rates  of 
local  carriers  quite  as  powerfully  as  do  local  interests  and 
rivals. 

There  are  occasions  where  competition  is  so  sharp, 
where  the  freights  of  some  large  shippers  or  combination 
of  shippers  is  so  needful  to  a  particular  road,  that  when 
reduced  rates  are  demanded  as  the  alternative  of  loosing 
the  tonnage,  the  carrier  can  scarcely  refuse,  and  will  devi- 
ate from  the  pubHshed  rates,  sometimes  below  the  rates 
of  its  rival  company.  The  question  of  rate  making 
cannot  be  estimated  on  a  theoretical  proposition  as  some 
have  inferred,  but  is  the  result  of  practical  observations 
and  compromises.  With  these  observations  presented  to 
us,  we  can  conceive  what  position  the  rate  maker  is 
placed  in. 

The  first  freight  schedule  of  rates  upon  a  new  road  in 
a  noncompetitive  district  or  territory,  is  based  on  sound 
principles,  and  if  a  manager  could  adhere  and  absolutely 
follow  it,  very  little  difficulty  would  be  experienced,  but 
every  manager  avails  himself  of  every  advantage  that  will 
bring  business,  often  sacrificing  a  profit  to  do  so.  There 
are  two  divisions  of  expense  necessary  to  be  consid- 
ered in  the  determination  of  rates,  namely : 

First. — The  cost  of  terminal  and  station  work. 

Second. — The  cost  of  handling. 

Every  shipment  requires  station  work  at  both  forward- 


49 

ing  and  receiving  stations,  and  requires  an  expense  for 
transporting  it.  The  station  expenses  for  a  short  haul 
are  the  same  as  for  a  long  haul,  but  the  transportation 
expenses  is  in  proportion  to  distance.  The  expense  at  a 
station  may  be  correctly  estimated  at  one  and  one-half 
cents  per  one  hundred  pounds,  or  sixty  cents  per  ton 
that  is  the  expense  at  both  the  forwarding  and  receiving 
stations,  and  one  half  cent  per  ton  per  mile  can  be  con- 
sidered a  profitable  rate  for  handling.  The  rate  for  one 
hundred  miles  on  this  basis  would  be  $1.20  per  ton  for 
station  expenses  and  one  hundred  miles  at  one-half  cent 
per  mile,  or  fifty  cents,  making  a  total,  or  the  rate  for  the 
one  hundred  miles,  ;^i.70.  Now,  if  a  manager  were  called 
upon  to  make  a  tariff  or  rates  for  a  new  road  in  a  non- 
competitive district,  whether  he  copied  an  old  tarriff  or 
followed  one  which  has  been  in  effect  at  some  former  time 
on  a  road  similarly  situated,  as  no  doubt  he  would,  without 
first  adhering  to  the  underlying  principles,  or  if  he  were 
compelled  to  rely  on  his  own  resources,  the  rates  which 
he  would  produce  would  be  substantially  on  this  mathe- 
matical calculation. 

Rate  making  in  a  competitive  district  is  not  so  easy. 
The  manager  in  charge  will  follow  the  quotations  of  his 
rivals  and  even  make  or  offer  a  more  advantageous  basis 
in  order  to  secure  the  business.  Unreasonably  low  rates 
never  happen,  as  a  rule,  except  in  the  case  of  traffic  to 
competitive  points.  It  is  unrestricted  competition  that 
brings  rates  below  what  is  just  and  reasonable,  and  reve- 
nue lost  by  the  adoption  of  unreasonably  low  rates  to 
competitive  points  can  only  be  compensated  for  by  rates 
to  noivcompetitive  points.  The  opportunity  of  the  ship- 
per combined  with  the  carrier's  asserted  necessity  is  a 
constant  temptation  to  bargain  for  preferential  rates,  and 


50 

agreements  between  rival  lines  to  maintain  schedule 
charges  are  usually  short  lived,  for  they  rest  mainly  on  a 
pledge  of  good  faith,  and  do  not  long  survive  when 
interest  inclines  either  party  to  break  them.  Joint  rates 
are  made  up  by  the  agreement  between  the  general 
freight  agents  of  the  roads  desiring  the  rate.  They  arc 
formed  by  a  combination  of  each  road's  local  rate  up  to 
the  nearest  junction  point  with  each  road.  It  frequently 
occurs  that  in  forming  a  joint  or  through  rate  one  or 
more  roads  may  take  an  arbitrary  position  and  demand 
as  its  or  their  proportion  of  the  rate  agreed  upon,  its  or 
their  local  rate  and,  when  this  be  the  circumstance  the 
remaining  portion  of  the  rate  agreed  upon  is  divided 
amongst  the  other  roads.  Then  again  another  road 
which  is  a  terminal  company  may  demand  in  addition  to 
its  proportion  of  the  agreed  rate  a  terminal  allowance, 
and  in  this  case  the  amount  must  be  deducted  from  the 
rate  which  has  been  agreed  upon  and,  the  balance  divided 
amongst  the  remaining  roads,  as  for  example: — A,  B,  C, 
&  D,  are  desirous  of  forming  a  rate  from  a  point  on  A,  to 
a  certain  point  on  D,  which  are  competitive  points,  their 
rival  road  has  been  receiving  all  the  cream  from  a  certain 
hne  of  merchandise  finding  a  desirable  market  at  the  certain 
point  located  on  D,  while  the  competing  roads  have  only 
been  receiving  the  skim-milk ;  so  they  meet  or,  perhaps, 
make  a  lower  rate  in  order  to  get  the  business,  as  their 
route  is  by  far  the  longest.  The  rate  agreed  upon  is  19 
cents  per  hundred  pounds,  and  the  basis  for  dividing 
the  rate  is  on  a  mileage  one.  A  to  receive  forty 
miles,  B  to  receive  thirty-five  miles,  C  to  receive  sixty- 
two  miles  and  D  to  receive  seventy-five  miles.  In  order 
to  ascertain  what  each  will  receive  of  the  rate  we  would 
find  the  percentage  of  each  to  the  total  miles  travelled,  as 
for  example ; 


51 

A's  mileage  is  40  or  40-212  of  19  cents  or  ;^.6  cts, 
B's       "        "  35  "  35-212  "  "       "     "  3.1   " 
C's       "        "  62  ".62-212  "  "       "     "5.6  " 
B's       "        "  75  "  75-212  "  "       "     "  6.7  " 


Total      212  19.0  cts. 

If  any  of  the  above  roads  were  to  receive  an  arbitrary 
amount  in  addition  to  their  regular  proportion  of  the  rate 
agreed  upon,  for  instance,  A  is  to  receive  a  terminal  of 
I J/C  cents  per  hundred  pounds  for  facilities  offered  as  the 
delivering  road,  plus  its  prorata  proportion  of  the  rate,  D 
is  to  receive  a  junction  allowance  of  }4  cent  per  hundred 
pounds  offering  a  connection  with  C,  plus  its  prorata 
proportion  of  the  rate,  the  amount  that  each  would  re- 
ceive and  the  process  of  figuration  is  as  follows.  We 
first  deduct  the  arbitrary  amounts,  namely,  terminal  i  j4 
cents,  and  junction  allowance  j4  cent,  or,  2  cents  in  all, 
leaving  but  17  cents  to  be  prorated.  We  would  then 
divide  this  amount  amongst  the  roads  as  per  the  foregoing 
example,  and  the  result  would  be  as  follows: 

A's  mileage  is  40  or  40  212  of  17  cts.  or  3.3  plus  11-2:4.8  cts. 

B's       "      "  35  "  35-212  "''"<< 2.8   " 

C's       '*      "  62  "  62-212  "  "    "    <' 4.9    " 

D's      "      "75  "  75-212  "  ''    "    "  6.0  plus  14 :    6.5    " 

Total         19.0  cts. 

East  and  West  bound  rates,  in  conjunction  with  the 
Trunk  lines,  is  another  name  given  to  rates.  These  rates 
cover  all  traffic  from  the  eastern  seaboard  territory  to 
western  points  and  are  subjected  to  the  rules  and  regula- 
tions of  the  associations  known  as  the  Trunk  Line  and 
Central  Traffic  Associations,    the  former  embraces  the 


52 

important  roads  leading  from  the  eastern  seaboard 
to  Buffalo,  Erie,  Salamanca,  Pittsburgh,  Parkersburg 
and  Wheeling,  which  points  are  known  as  the  western 
termini  of  the  Trunk  lines,  and  are  also  the  eastern  ter- 
mini of  roads  in  the  Central  Traffic  Association.  Under 
agreements  of  several  years  standing  it  has  been  the  cus- 
tom of  these  roads,  forming  by  connections  through  lines 
from  the  seaboard  to  the  west,  to  determine  through 
rates  from  New  York  to  Chicago,  and  to  adopt  such  rates 
as  the  standard  or  basis  for  the  construction  of  tariffs 
from  other  eastern  cities  and  points  adjacent  thereto, 
which  are  directly  or  indirectly  in  competition  for  west- 
ern business. 

The  principal  seaboard  cities  are  New  York,  Boston, 
Philadelphia  and  Baltimore,  and  adjacent  to  each  of  these 
are  important  industries  commanding  for  the  points  at 
which  they  are  located  equal  transportation  rates  and 
facilities  with  the  larger  cities.  For  twenty  years  or  more 
the  rates  from  Boston  to  western  competitive  points 
have  been  the  same  as  from  New  York.  From  Philadel- 
phia and  Baltimore  the  rates  are  "  agreed  differentials " 
less  than  New  York,  the  Baltimore  rates  being  also 
lower  than  Philadelphia  rates. 

The  westward  traffic  from  the  seaboard  is  carried  prin- 
cipally under  classified  tariffs.  The  number  of  classes 
and  the  rates  for  each  as  now  in  effect  are  shown  in  the 
following  table  : 


53 


West  Bound  Rates,  Seaboard   Cities  to  Chicago. 

Classes  in  cents  per  loo  pounds. 

I     2     3     4     5     (? 

From    New  York   to  Chicago  .    . 

From  Boston  to  Chicago 

From  Philadelphia  to  Chicago  .    . 
Philadelphia,  lower  than  New  York 
From  Baltimore  to  Chicago  .    .    . 
Baltimore  lower  than  New  York  . 
Baltimore  lower  than  Philadelphia 


75  65  50  35  30  25 

75  65  50  35  30  25 

69  59  48  33  28  23 

662222 

67  57  47  32  27  22 

883333 

2     2     I     I     I     I 


These  rates  have  sprung  up  out  of  the  conferences  of 
many  years,  and  the  circumstances  under  which  they  were 
established  varied  in  the  different  years  and  precludes  the 
adoption  of  any  form  of  analysis  which  could  be  applied 
to  the  determination  of  these  rates. 

Under  existing  arrangements  the  roads  leading  from 
the  east  publish  rates  and  issue  through  bills  of  lading 
to  all  western  points  located  on  the  railroads  within  the 
territory  west  of  Buffalo  and  Pittsburg,  east  of  the  Mis- 
sissippi and  north  of  the  Ohio  rivers.  The  agreed  rates 
and  distances  from  New  York  to  Chicago  are  taken  as 
the  standard,  or  one  hundred  per  cent.  Through  rates 
to  the  principal  western  cities,  towns  and  junction  points, 
in  the  territory  above  described,  are  computed  at  a  per- 
centage of  the  New  York-Chicago  rates,  based  generally 
on  the  relative  mileage  of  such  points  to  the  Chicago 
mileage.  For  example,  rates  New  York  to  Detroit, 
Michigan,  are  computed  at  seventy-eight  per  cent,  of  the 
rate  New  York  to  Chicago,  it  being  seventy-eight  per 
cent,  of  the  total  distance.  In  the  same  manner  rates 
New  York  to  Indianapolis,  Indiana,  are  ninety-three  per 
cent,  of  the  New  York-Chicago  rates.     Thus  the  New 


54 

York-Chicago  rates,  being  at  all  times  applied  as  the 
basis,  would,  when  changed,  create  relative  changes  in 
the  rates  to  the  other  western  points.  In  a  similar 
manner  the  relation  as  to  rates  is  maintained  from  the 
other  eastern  cities.  When  rates  from  New  York  to 
western  points  are  changed,  like  changes  are  made  from 
Boston,  Philadelphia  and  Baltimore,  and  points  receiving 
the  same  rates,  the  "differentials"  as  between  the  eastern 
cities  being  at  all  times  maintained.  The  relative  dis- 
tance between  points  between  which  freight  is  to  be 
carried  is  substantially  the  basis  of  computation.  There 
are  sometimes  many  routes  of  different  lengths  between 
the  given  points,  and  rates  may  sometimes  be  based 
upon  the  longest  route  or  the  shortest,  and  sometimes 
on  the  average  length  of  the  several  routes.  After  a 
rate  has  been  established  for  a  competing  point,  Indian- 
apolis, Ind.,  it  being  ninety-three  per  cent,  of  New  York- 
Chicago  distance,  then  the  rate  from  a  point  beyond 
Indianapolis,  Ind.,  if  it  be  not  a  competing  point,  but  a 
local  point  beyond  on  any  one  of  the  various  roads 
which  run  to  Indianapolis,  is  added  to  the  through  rate. 
The  local  rate  for  a  short  distance  can  generally  only  be 
charged  to  the  first  competing  point.  Again,  if  a  rate  is 
wanted  for  a  point  west  of  Chicago,  but  east  of  the 
Mississippi  River,  the  distance  west  thereof  is  added  to 
the  New  York-Chicago  distance,  and  if  it  is,  say  200 
miles  beyond,  the  rate  to  that  point  would  be  twenty  per 
cent,  higher  than  the  rate  to  New  York-Chicago,  or  one 
hundred  and  twenty  per  cent,  of  the  rates  current. 

Differential  Rates: — This  term  is  made  use  of  in  a 
somewhat  restricted  sense,  being  applied,  not  to  the 
differences  in   rates  generally  or  between  the  several 


55 

classes  of  freight  as  they  are  arranged  in  the  tariffs  of 
freight  charges,  but  to  the  differences  in  rates  which  are 
made  by  railroad  companies  as  between  the  several 
Atlantic  seaport  cities.  They  have  not  been  determined 
on  any  principle  but  are  simply  the  result  of  a  com- 
promise between  the  various  companies. 

An  important  element  in  the  arrangement  of  rate 
schedules  is  the  distinction  made  in  the  class  of  railroads 
or  routes,  by  which  certain  routes  are  under  agreement 
allowed  to  charge  a  lower  rate  than  others  to  the  same 
points  of  destination. 

From  each  of  the  eastern  cities  there  are  two  classes 
of  roads,  commonly  termed  the  "  standard  lines "  and 
the  "differential  hnes."  The  standard  Hnes  are  those 
which  are  conceded  to  possess  advantages  over  their 
competitors  by  reason  of  shorter  all-rail  distance  and 
superior  facilities  arising  from  old  and  well-established 
connections  and  freight  organizations.  The  differential 
lines  are  those  which,  on  account  of  the  longer  routes 
and  inadequate  facilities,  or  owing  to  their  through 
routes  being  partly  by  water,  or  from  other  dis- 
advantages, cannot  command,  at  even  rates  with  the 
more  direct  lines,  an  amount  of  tonnage  which  under 
customary  methods  for  determining  such  matters  would 
be  considered  a  fair  proportion. 

With  a  view  to  equalizing  these  conditions,  and 
securing  the  permanency  of  the  tariffs,  as  well  as  to 
bring  about  a  fair  distribution  of  the  traffic,  the  "  differ- 
ential lines "  are  accorded  somewhat  lower  rates  than 
the  "standard  lines."  Differential  rates  may  thus  be 
considered  simply  premiums  offered  for  business. 

At  this  time  there  are  ten  different  lines  leading  from 
New  York  competing  for  western  business.     Three  are 


56 

"  standard*  lines "  and  seven  are  "  differential  lines." 
The  standard  lines  are  N.  Y.  C.  &  H.  R.  R.  Co.,  Penn- 
sylvania R.  R.  Co.  and  the  B.  &  O.  R.  R.  Co.  The 
differential  lines  are  N.  Y.,  L.  E.  &  W.  R.  R.  Co.,  L.  V. 
R.  R.  Co.,  W.  S.  R.  R.  Co.,  D.  L.  &.  W.  R.  R.  Co., 
N.  Y.  O.  W.  R.  R.  Co.,  C.  &  C.  Ry.  Route  and  the 
Central  Vermont  R.  R.  Route.  The  rates  governing  all 
traffic  moving  via  any  of  the  standard  routes  from  New, 
York  to  Chicago  for  the  six  classes  are 

123456 

75  65  50  35  30  25 

per  one  hundred  pounds,  and  the  rates  for  traffic  moving 
via  the  "  differential  lines  "  are  for  the  first  four 


I 

2 

3 

4 

5 

6 

70 

6i 

47 

33 

29 

^    24 

per  one  hundred  pounds,  and  for  the  latter  three  propor- 
tionately alike.  With  these  facts  the  reader  can  con- 
ceive the  meaning  of  "differential  rates;"  merely 
advantages  offered  to  lines  of  longer  routes  and 
inadequate  facilities. 


PASSENGER  RATE  CONSTRUCTION. 


The  construction  of  passenger  rates  is  slightly  differ- 
ent from  freight  rate  making.  In  the  first  place  the  rate 
maker  is  not  confronted  with  the  fact  of  classification, 
and  is  not  compelled  to  follow  any  specific  principles  in 
the  figuration  of  a  rate,  merely  the  basis  of  so  much  per 
mile  per  passenger.  Local  passenger  rates  are  very  simple 
in  their  construction ;  they  are  usually  based  on  three  cents 
per  mile  for  one  way,  and  for  a  round  trip  two-thirds  of 
the  double  one  way  rate.  Of  course  there  may  be  some 
exceptions  to  this  problem,  on  the  ground  that  every 
company  may  follow  its  own  specific  principles;  how- 
ever, should  a  manager  be  called  upon  to  construct  a 
schedule  of  passenger  rates  for  a  territory  where  there  is 
no  competition  he  would,  if  there  were  no  other  schedule 
to  follow,  simply  adhere  to  this  mathematical  principle, 
and  in  doing  so  the  revenue  accruing  therefrom  would 
meet  all  expenses  created  through  the  passenger  service. 

Through  passenger  rates  are  made  by  the  agreement 
between  the  general  passenger  agents  of  the  roads 
desirous  of  the  rate.  They  are  not  made  up  by  a  com- 
bination of  each  road's  local  rate,  but  simply  on  so  much 
per  mile.  Of  course  this  rule  will  in  almost  every 
particular  be  generalized  to  make  fit  any  case,  but 
exceptions,  however,  spring  up  widely  different  from 
these.  Looking  at  the  question  from  a  general  stand- 
point, they  are  computed  in  this  way:  The  several 
passenger  agents  hold  a  conference  and  agree  on  a  rate 
from  the  points  in  question ;  it  may  be  an  arbitrary  rate 

.    57 


58 

or  so  much  per  mile.  If  it  be  the  former,  then  the  roads 
sharing  in  the  rate  would  receive,  as  their  proportion  of 
the  rate,  so  much  per  mile  of  the  total  distance;  for 
example:  A,  B,  C  and  D  are  desirous  of  securing  some 
business  from  a  point  on  A  to  a  point  on  D,  and  in 
order  to  do  this  they  must  make  it  low  enough,  and  at 
the  same  time  observe  the  fact  of  an  adequate  return. 
The  total  distance  is  one  thousand  miles  and  the  rate 
agreed  upon  is  ^16.50  or  i  65-100  cents  per  mile.  A  is 
to  receive  forty  miles,  or  66  cents  of  the  rate  per 
passenger;  B  is  to  receive  one  hundred  and  ten  miles, 
or  ;^  1. 82  of  the  rate  per  passenger;  C  is  to  receive  four 
hundred  miles,  or  ;^6.6o  of  the  rate  per  passenger;  and 
D  is  to  receive  four  hundred  and  fifty  miles,  or  ;^7.42  of 
the  rate  per  passenger.  If  the  same  rate  were  to  be 
divided  on  so  much  per  mile,  regardless  of  the  distance, 
that  is  to  say,  each  road  to  receive  as  its  proportion  of 
the  rate,  namely :  A  is  to  receive  its  regular  local  rate 
up  to  the  junction,  being  the  same  rate  which  it  formerly 
received  prior  to  the  consolidation,  and  should  D  demand 
as  its  proportion  of  the  rate  2  cents  per  mile,  and  B  and 
C  to  receive  as  their  proportion  of  the  remainder  on  so 
much  per  mile  of  the  aggregate  mileage  of  B  and  C,  the 
rate  would  divide  as  follows : 

A's  proportion  40  miles  at  3  cents  per  mile  or  ;$  1.20 
D's  "        450      "      "  2      "       "      "      "     9.00 

The  remainder  or  ;^6.30  would  divide 

B's  proportion  no  miles  at  i  y^^^^cts.per  mile  or  $i.;^6 
s  400  ijoo  4-9" 

These  are   only   some    of   the    many    examples    of 


59 

passenger  rate  construction,  but  it  is  the  author's  hope 
that  they  will  lend  a  thought  towards  the  comprehension 
of  the  subject. 

At  this  juncture  it  is  thought  that  a  few  remarks 
devoted  to  the  explanation  of  some  of  the  terms  used  in 
conjunction  with  the  passenger  business  would  be  bene- 
ficial to  the  reader,  believing  that  in  case  of  travel  they 
would  be  available. 
What  is  the  definition  of  Stop-off? 

By  a  stop-off  is  understood  a  departure  from  the  con- 
tinuous train  short  of  the  final  destination  of  the  ticket; 
a  failure  to  take,  at  a  junction  or  transfer  point,  the  first 
connecting  train  therefrom,  or  the  stopping  off  at  an 
intermediate  station  by  reason  of  having  commenced  the 
journey  on  a  train  which  does  not  stop  at  or  connect  for 
the  desired  destination. 
What  is  a  Mileage  Book  Ticket  ? 

These  are  books  containing  one  thousand  miles  and 
are  usually  sold  at  a  rate  of  two  cents  per  mile,  and  are 
only  good  to  the  persons  in  whose  favor  they  are  drawn, 
Wliat  is  a  Computation  Ticket  ? 

These  are  tickets  of  different  denominations,  ran^ine 
from  fifteen  trips  to  even  as  high  as  one  hundred  trips; 
they  are  usually  based  on  so  much  of  the  total  cost  of 
trips  specified,  say  three-quarters  or  two-thirds  of  the 
total  cost,  except  where  they  are  simply  an  arbitrary 
amount. 
What  are  some  of  the  tickets  and  how  distingidsJied? 

Local  one  way. 

Local  half  one  way. 

Local  round  trip ;  no  round  half  fare  tickets  are  sold. 

Coupon  tickets  are  issued  in  conjunction  with  foreign 
roads.     They  are  of  a  limited  and  unlimited  character. 


6o 

Attached  to  these  tickets  are  coupons  specifying  a 
certain  distance  or  the  points  from  and  to  which  they  are 
good;  these  are  detached  by  the  train  conductor  and 
forwarded  to  the  auditor  of  the  road,  and  are  his 
authority  when  rendering  bills  against  the  road  selling 
the  ticket. 

Limited  tickets  are  only  good  within  a  certain  period 
of  time,  but. 

Unlimited  tickets  are  good  until  used  and  are  sold  at 
a  higher  rate. 

The  reader  may  at  some  time  be  called  upon  to  ship 
a  corpse;  unfortunate  as  it  be;  however,  let  us  not  con- 
sider it  in  its  worst  stage  but  from  a  point  of  necessity. 
The  person  shipping  a  corpse  must  accompany  it, 
together  with  a  certificate  of  a  reputable  physician  or  of 
the  board  of  health,  stating  the  cause  of  the  death.  In 
every  case  a  full  first-class  fare  must  be  paid. 


FIXING  THE  RATES. 


The  fixing  of  rates,  that  is  to  say,  what  will  be  the 
proper  rate  to  charge  on  articles  transported,  is  the  topic 
for  consideration. 

This  question  is  of  a  wide  conception  and  its  develop- 
ment of  to-day  is  the  outgrowth  of  irregularities  and 
divided  attention.  The  fixing  of  rates  as  practiced  to-day 
is  erroneous  and  not  in  any  sense  founded  on  good  and 
sound  principles,  but  is  simply  the  action  of  com- 
promises. This  hit  or  miss  method  of  rate  making  has 
been  allowed  to  drift  along  year  after  year  without  any 
serious  attempts  to  institute  a  radical  reform,  and 
naturally  provokes  the  inquiry,  why,  if  the  matter  is  of 
such  importance  as  seems  to  be  universally  conceded,  it 
has  not  already  received  an  adequate  consideration.  The 
reason  is  not  far  to  seek.  Railroad  officials  are  busy 
men,  more  occupied,  perhaps,  than  any  other  class.  The 
matters  crowding  upon  a  traffic  manager  every  day  are 
far  beyond  his  time  or  strength,  and  he  will  dispose  of 
them  in  the  quickest  possible  time;  that  means  things 
keep  moving  in  the  same  old  rut.  No  good  reason  can 
be  given  for  the  marked  differences  appearing  in  the 
many  rate  sheets  throughout  the  country  other  than 
that  the  judgment  of  men  differ  upon  these  matters  as 
widely  as  upon  other  questions. 

Schedule  making,  when  taken  up  in  a  systematic 
manner,  becomes  a  question  of  independent  thought  and 
judgment.  The  important  question  to  each  officer  of 
every  company  is  how  to  fix  his  rates  so  as  to  produce 

6i 


62 

the  largest  aggregate  income  necessary  to  meet  all  fixed 
charges  and  operating  expenses,  and  at  the  same  time 
observe  the  required  uniformity  and  have  due  regard  to 
matters  of  public  policy. 

When  a  manager  starts  out  to  construct  a  schedule  of 
rates  for  a  new  road  his  first  step  would  be  to  classify 
the  commodities  to  be  transported ;  that  is  to  say,  in  the 
several  classes  which  he  decides  upon.  The  purpose  of 
the  classification  is  to  simplify  the  difficulties  of  rate- 
making  by  grouping  together  the  different  articles  which 
it  is  thought  should  rightfully  make  the  same  contribu- 
tions towards  the  payment  of  fixed  charges  and  opera- 
ting expenses.  The  second  step,  although  not  formerly 
practiced,  would  be  to  determine  the  relative  rates  upon 
the  different  classes;  that  is  to  say,  what  ratio  the  rates 
of  one  class  should  bear  to  rates  of  other  classes.  This 
measure  is  an  absolute  necessity  to  preserve  uniformity. 
The  third  step  would  be,  what  the  actual  rate  should  be. 

Having  these  thoughts  presented  to  us  let  us  consider 
them  briefly.  The  first  thought — which  refers  to  the 
classification  of  articles  necessary  to  simplify  rate- 
making — is  an  essential  feature.  It  would  not  be 
practicable  to  charge  a  uniform  rate  on  all  articles,  as  it 
would  prohibit  the  movement  of  many.  For  instance, 
the  wheat  or  flour  of  the  western  prairies  would  never 
reach  the  several  seaboard  cities,  were  they  subjected  to 
the  same  conditions  and  the  same  rate  as  on  other 
manufactured  articles,  so  it  has  been  found  expedient  to 
classify  the  articles. 

The  second  step  is  to  determine  the  relative  per- 
centage of  one  class  to  the  other  classes.  If  a  manager 
starts  out  with  only  three  classes  they  certainly  should 
bear  or  have  a  relationship,  if  a  systematic  principle  is  to 


63 

be  followed.  In  the  past  the  relationship  of  one  class  to 
the  other  has  been  wrought  simply  by  compromises, 
and,  while  the  proceedings  are  somewhat  detailed,  let  us 
only  consider  the  principle  that  we  would  think  to  be  an 
equitable  one. 

Many  plans  for  the  proper  way  of  dcterming  the 
relationship  of  the  various  classes  of  rates  have  been 
presented;  some  are  able  while  others  are  incomplete  in 
themselves.  The  percentage  system  is  one  that  would, 
it  is  hoped,  meet  every  requirement.  This  system  would 
afford  means  whereby  the  varying  and  multiform  grades 
of  differences  in  the  relative  transportation  conditions  of 
the  many  articles  of  the  same  general  class  may  be 
expressed,  while  the  distribution  of  all  articles  into 
classes  on  generic  lines  will  permit  each  section  of  the 
country  to  adjust  its  carrying  charges  so  as  to  develop 
its  own  peculiar  interests.  The  plan  is  to  take  each 
article  in  its  transportable  form  and  follow  it  through 
the  varying  conditions  affecting  its  transportation  value 
to  the  highest  conditions  in  its  class,  or  until  it  is  taken 
out  of  its  original  assignment  and  put  into  the  composite 
class  because  of  its  union  with  other  products.  Instead 
of  the  variable  and  irregular  rates  as  are  in  practice 
to-day,  the  use  of  a  single  basic  rate  to  apply  on  all 
articles  in  the  same  class  will  always  be  maintained. 
That  is  to  say,  suppose  the  basic  rate  on  a  certain 
product  betw^een  two  points  to  be  one  dollar  per 
hundred  pounds.  Each  article  included  under  that 
specific  product  wall  then  be  charged  such  a  proportion 
of  one  dollar  as  is  indicated  by  the  percentage  given  to 
it;  that  is,  if  it  be  a  twenty-five  per  cent,  article  the  rate 
would  be  twenty-five  cents  per  one  hundred  pounds,  and 
so  on.     The  basic  rates  on  these  general  classes  could 


64 

be  varied  to  suit  circumstances,  but  every  article  in  a 
class  would  bear  the  same  relation  to  every  other  article 
in  the  same  class,  regardless  of  what  be  the  general  rate 
on  that  class.  The  establishment  of  a  fixed  percentage 
relation  for  each  article  in  its  own  class  will,  if  intelli- 
gently done,  insure  that  every  article  shall  pay  its  proper 
proportion  of  the  total  charges  on  that  class;  while  the 
variation  in  rate  required  by  the  diverse  interests  of  the 
carrier  will  determine,  w^ithin  the  limit  of  reasonableness, 
what  shall  be  the  basic  rate  on  each  class.  As  already 
presented,  a  reasonable  rate  in  one  section  of  the  country 
may  not  be  in  another.  With  this  fact  in  mind  it  would 
hardly  be  practicable  to  make  a  division.  There  is  no  one 
who  is  better  acquainted  with  the  fact  of  how  much  a 
certain  shipment  cost  to  transport  and  what  were  the 
assumed  risks  in  carrying  it  than  the  traffic  manager. 

In  a  previous  chapter  the  system  of  rate  making  is 
illustrated.  The  two  divisions  of  expense  that  are 
necessary  to  be  considered  are,  first,  terminal  expenses, 
which  includes  every  expense  at  that  point.  Second, 
the  hauling.  The  station  expenses  for  a  short  haul  are 
just  the  same  as  for  a  long  haul,  but  the  hauling  cost  is 
charged  according  to  the  distance;  therefore,  in  deter- 
mining the  general  rates  for  the  various  classes,  these 
points  should  be  considered. 

The  use  of  this  system  w^ould  permit  any  shade  of 
difference  in  the  rate  of  charges  that  may  be  desired,  so 
that  supposing  wheat  to  be  a  thirty  per  cent,  article,  bran 
might  be  made  one  or  two  per  cent,  lower,  and  so  on. 

The  use  of  this  system  would  certainly  simplify  tariff 
making  and  at  the  same  time  make  the  use  of  tariffs  by 
the  public  very  much  more  practicable  than  is  now  the 
case. 


65 

In  1852  the  Pennsylvania  Railroad  received  as  an 
average  freight  rate  5  and  42-100  cents  per  ton  per  mile. 
In  1892  the  average  rate  was  but  .647  cents  per  ton  per 
mile.  In  1S60  the  Filchburg  Railroad  received  as  an 
average  freight  4  lo-ioo  cents  per  ton  per  mile,  and  in 
1892  the  average  rate  was  .925  cents  per  ton  per  mile. 
These  figures  give  plainly  the  differences  in  rates  as 
between  the  Middle  and  llic  New  England  States,  there- 
fore no  set  system  of  the  price  per  ton  per  mile  could 
with  intelligence  be  given. 


CONSTRUCTION    OF   FREIGHT    CLASSIFI- 
CATION. 


To  trace  the  development  of  the  present  method  of 
making  freight  classifications  would  be  an  interesting 
study.  What  every  student  wants  to  know  is  not  so 
much  how  the  present  conditions  were  brought  about 
but  how  and  what  are  the  principles  of  necessity 
requisite  in  the  making  up  of  a  freight  classification. 
The  step  from  a  railroad  classification  of  1856,  which 
contained  thirty-three  specifications,  in  addition  to  the 
clause  "Analogous  articles  will  be  charged  at  corre- 
sponding rates,"  to  the  present  classification,  comprising 
six  thousand  articles,  is  a  long  one,  and  it  would  be 
impracticable  to  give  even  a  minute  account  of  its  origin. 

Ordinarily  a  classification  is  understood  to  mean  one 
thing  and  a  rate  sheet  another;  whereas,  as  a  matter  of 
fact,  they  are  only  parts  of  the  same  thing.  If  we  were 
to  take  the  rates  away  from  the  classification,  what 
would  its  use  be  to  us?  and  if  we  were  to  take  the 
classification  away  from  the  rate  sheet  the  charging  and 
fixing  a  rate  in  an  intelligent  manner  would  be  one  of 
the  impossibilities. 

Prior  to  the  date  of  the  Interstate  Commerce  Act 
there  were  numerous  classifications  throughout  the 
country,  but  to-day  there  are  only  three,  "official," 
"western"  and  "southern." 

There  are  two  general  classes  of  schedules  under 
which  the  freight  traffic  of  the  United  States  is  carried  ; 
namely,  Class  Tariffs  and  Commodity  Tariffs.  Class 
66 


6; 

tariffs  are  arranged  to  show  the  rates  of  the  respective 
classes  contained  in  the  freight  classification. 

In  the  commodity  tariff  are  found  the  great  majority 
of  articles  carried  by  the  railways,  classified  in  accord- 
ance with  the  various  elements  that  properly  enter  into 
the  determination  of  freight  charges.  Under  these  are 
also  found  the  commodities  above  mentioned,  and 
although  exceptionally  treated  in  certain  sections  as  to 
rates,  they  are  all  amenable  to  some  rule  of  the  classifi- 
cation. The  rate-making  foundation  for  all  commodities 
is  seen  to  lay  largely  in  the  freight  classification.  The 
commodity  tariffs  have  reference  to  schedules  applicable 
to  such  articles  as  grain,  lumber,  coal,  live  stock,  dressed 
beef,  fertilizers,  oil,  etc.,  transported  between  sections  of 
the  country  where  these  articles  have  attained  a  com- 
mercial and  shipping  importance  which  has  made 
necessary  specific  rules  for  their  transportation  differing 
from  those  covering  classified  traffic,  as  well  as  a  some- 
what lower  scale  of  rates  than  is  applied  to  the  former. 

The  development  of  the  railroad  business  of  the 
country  and  the  volume  of  business  interchanged,  has 
been  the  means  of  enlargement  and  extension  of  freight 
classifications.  These  publications,  which  are  arranged 
in  an  enlarged  and  convenient  manner,  wherein  may  be 
found  all  commodities  of  commerce,  described  in  every 
probable  form  of  shipment,  with  a  rate  reference  for 
each  description,  together  with  the  rules  and  regulations 
under  which  each  will  be  received  for  carriage,  are  now 
current  guides  to  the  shipping  public  and  have  an 
enormous  circulation. 

Concerning  the  basis  of  constructing  classifications, 
it  may  be  said  to  have  been  early  discovered  that  the 
charges  for  transportation  of  different  articles  of  freight 


6S 

could   not  be   apportioned    among   such   articles   with 
regard  alone  to  the  cost  of  carriage. 

This  basis  of  determining  the  charges,  it  was  found, 
would  confine  to  narrow  limits  the  movement  of  different 
articles  whose  bulk  or  weight  was  large  in  comparison 
to  their  value,  while  heavier  articles  with  less  bulk  would 
be  made  to  pay  disproportionately  low  rates.  Under  the 
system  of  apportioning  the  charges  strictly  to  the  cost 
some  kinds  of  commerce  which  have  been  very  useful  to 
the  country,  and  have  a  tendency  to  bring  different  sec- 
tions into  more  intimate  business  and  social  relations, 
could  never  have  amounted  to  any  considerable  magni- 
tude, and  in  some  cases  could  not  have  existed  at  all,  for 
the  simple  reason  that  the  value  at  the  place  of  delivery 
would  not  equal  the  purchase  price  with  the  transpor- 
tation added.  The  traffic  would  thus  be  precluded, 
because  the  charge  for  carriage  would  be  greater  than 
it  could  bear.  On  the  other  hand,  the  rates  for  the 
carriage  of  articles  which,  with  small  bulk  or  weight, 
concentrated  great  value,  would,  on  that  system  of 
making  them,  be  absurdly  low  when  compared  to  the 
value  of  the  articles,  and  perhaps  not  less  so  when  the 
comparison  was  made  with  the  value  of  the  service  in 
transporting  them. 

Accordingly  it  was  found  not  to  be  unjust  to  distribute 
the  entire  cost  of  service  among  all  articles  carried,  on  a 
basis  that  gave  greater  consideration  to  the  relative  value 
of  the  service  than  to  the  cost.  Such  a  method  would 
be  most  beneficial  to  the  country;  it  would  enlarge 
commerce  and  extend  communication,  and  would  be 
better  for  the  railroads  because  of  the  increased  traffic 
which  would  be  brought  to  them. 

The  value  of  the  article,  carried  under  this  system, 


69 

would  be  the  most  important  element  in  determining 
what  freight  charge  it  should  bear.  Other  considera- 
tions, however,  equally  important,  must  not  be  over- 
looked when  the  freight  classification  is  to  be  made. 
The  classifications  as  now  constructed  have  for  their 
foundation  the  following  elements: 

The  competitive  element,  or  the  rates  made  necessary 
by  competition. 

The  volume  of  the  business;  that  is,  the  tonnage 
movement. 

The  direction  in  which  the  freight  moves ;  that  is, 
whether  it  moves  in  the  direction  in  which  most  of  the 
freight  is  transported  or  in  the  reverse  direction  in  which 
empty  cars  are  running. 

The  value  of  the  article. 

The  bulk  and  weight. 

The  degree  of  risk  attending  transportation. 

The  facilities  required  for  particular  or  special  ship- 
ments. 

The  conditions  attending  transportation,  such  as  fur- 
nishing special  equipment,  as  in  the  case  of  private 
dressed  beef,  cars  specially  adapted  for  freight  of  a 
perishable  nature,  or  cars  of  large  size  for  freight  of 
extraordinary  bulk. 

Another  condition  which  has  also  received  considera- 
tion is  the  analogy  which  the  new  articles  to  be  classified 
bear  to  other  articles  found  in  the  classification.  The 
conditions  under  which  railroad  companies  can  afford  to 
transport  traffic  have  a  large  influence  in  determining  the 
classification. 

These  are  the  general  rules  under  which  classifications 


70 

are  constructed,  and  while  to  a  great  extent  controlling, 
the  classifications  are,  notwithstanding,  in  great  measure 
a  series  of  compromises,  the  participants  in  which  are 
not  alone  the  railroads,  but  also  the  shippers  and  repre- 
sentatives of  business  interests  throughout  the  country, 
the  latter  being  afforded  ample  opportunity  to  join  with 
the  railroads  in  the  discussion  as  to  the  proper  classifica- 
tion   of  articles    of    shipment    affecting  their   interests. 

While  the  pressure  for  reduction  is  very  strong  from 
certain  localities,  concessions  are  not  now  so  readily 
granted,  as  the  territory  covered  by  the  freight  classifica- 
tions is  so  large  that  great  care  in  the  assignment  of 
articles  to  particular  classes  must  be  taken  in  order  to  avoid 
working  an  injury  to  any  particular  section.  The  com- 
mercial and  transportation  interests  are  regarded  as 
identical,  and  the  welfare  of  the  whole  territory  and  all 
interests  affected  must  be  considered.  It  is  however, 
occasionally  observed  that  particular  localities  are  to 
some  extent  preferentially  served  by  the  action  of  the 
carriers  w^ho  resist  proposed  changes  in  the  classification, 
for  the  reason  that,  in  their  opinion,  they  will  operate  to 
the  prejudice  of  certain  patrons.  Thus  exceptions  to  the 
classification  are  created  by  a  road  continuing  to  carry 
some  articles  at  one  class,  when  in  the  opinion  of  a 
majority  of  the  roads  using  the  classification,  the  articles 
could  well  stand  a  higher  rating.  At  this  time  fewer 
articles  are  rated  independently  of  the  classification  than 
ever  before  in  the  history  of  railroads. 

At  this  time  there  are  practically  but  three  freight 
classifications  in  use  throughout  the  United  States; 
namely,  the  Official  classification,  the  Southern  Railway 
and  Steamship  Association  classification,  and  the  Western 
classification.    The  application  of  these  are  as  follows : 


71 

First : — The  official  classification  is  used  almost  exclu- 
sively throughout  the  territory  cast  of  Lake  Michigan, 
Chicago,  and  the  Mississippi  River,  and  north  of  the 
Ohio  and  Potomac  Rivers  to  the  Atlantic  sea-board. 

Second : — The  Southern  Railway  and  Steamship  Asso- 
ciation classification  is  applied  generally  to  roads  south 
of  the  Ohio  and  east  of  the  Mississippi  River  to  the  sea- 
board. 

Third  : — The  Western  classification  governs  the  terri- 
tory north  and  west  of  Chicago,  west  of  a  line  drawn  from 
Chicago  to  St.  Louis,  and  west  of  the  Mississippi  River, 
St.  Louis  to  New  Orleans. 

In  each  of  the  three  divisions  of  territory  described 
exceptions  to  these  particular  classifications  are  made  to 
some  extent  by  state  commissions,  and  by  individual 
roads  for  state  or  local  traffic.  Traffic  carried  between 
different  points  in  the  sections  above  described  is  usually 
taken  at  either  one  or  the  other  of  these  leading  classifi- 
cations. For  example,  the  classified  traffic  from  the 
Atlantic  sea-board  to  the  Pacific  coast  is  carried  under 
the  Western  classification ;  traffic  from  Chicago  to 
Atlanta,  Ga.,  is  carried  under  the  Southern  Railway  and 
Steamship  Association  classification. 

The  territory  throughout  which  the  official  classifi- 
cation is  shown  to  govern  is  the  largest  both  in  point  of 
tonnage  and  communities  served.  At  the  date  of  the 
passage  of  the  act  to  regulate  commerce,  one  hundred 
and  thirty  one  (131)  railroad  companies  within  the  terri- 
tory defined  above  as  governed  by  the  official  classifica- 
tion, each  had  a  separate  classification,  in  addition  to 
those  classifications  which  had  grown  up  mainly  to  foster 
local  conditions,  and  were  thought  to  be  beneficial  to  the 


72 

particular  roads  and  shippers,  there  were  five  associa- 
tions of  raihoad  companies  each  having  a  classification. 
These  classifications  were  as  follows  : 

First : — The  local  ckssification  of  each  railroad  com- 
pany. 

Second: — The  through  west-bound  classification,  gener- 
ally known  as  the  "  Trunk  Line  classification,"  applying 
to  through  traffic  originating  at  sea-board  cities  and 
points  east  of  the  western  termini  of  the  trunk  lines,  and 
destined  to  Buffalo,  Erie,  Pittsburg,  Parkersburg,  etc., 
and  to  a  number  of  competitive  points,  trade  centers  or 
railroad  junction  beyond. 

Third: — The  east-bound  classification,  which  alone 
applied  to  east-bound  traffic  originating  in  the  territory 
east  of  Chicago  and  the  Mississippi  river,  west  of  the 
western  termini  of  the  trunk  lines  and  points  east 
thereof  ^ 

Fourth: — Traffic  between  competitive  interior  points 
in  the  Middle  States ;  namely.  New  York,  Pennsylvania, 
New  Jersey,  Delaware,  Maryland,  Virginia  and  West 
Virginia,  and  between  the  several  trunk  lines  and 
connecting  roads,  was  governed  by  the  joint  merchandise 
classification,  which  also  applied  to  the  local  traffic  on 
certain  roads. 

Fifth : — The  Middle  and  Western  States  classification 
applied  to  the  traffic  between  competitive  interior  points 
west  of  the  western  termini  of  the  trunk  lines  east  of  the 
Mississippi  River  and  north  of  the  Ohio  River. 

When  it  became  certain  that  the  interstate  commerce 
act  would  become  a  law,  early  in  1887,  tJhe  railroad 
companies  decided  at  a  meeting  held  for  that  purpose 


73 

that  it  would  be  necessary  to  create,  and,  if  possible, 
adhere  to  a  uniform  classification.  At  this  meeting  there 
was  appointed  a  special  committee,  composed  of  represen- 
tatives of  ten  or  twelve  different  roads,  whose  duty  it  was 
to  go  over  the  various  classifications  then  in  force  and 
unite  them  into  one  classification,  and  the  result  of  the 
work  of  this  committee  was  the  formation  of  Official 
Classification  No.  i. 

Under  the  former  arrangement  the  through  or  larger 
portion  of  the  classified  traffic  was  carried  in  two  classifi- 
cations; the  west-bound  classification  was  applied  to 
traffic  moving  westward  while  an  entirely  separate 
classification  was  applied  to  traffic  moving  eastward. 

These  two  classifications,  as  well  as  the  rates  of  the 
respective  classes,  were  entirely  dissimilar;  the  latter 
made  provision  for  twelve  or  thirteen  classes,  which 
embraced  the  heavier  or  bulk  freight  carried  mainly  in 
car  load  quantities  from  the  western  center  to  the  sea- 
board; while  the  former  provided  almost  exclusively  for 
package  freight,  usually  transported  in  small  or  less  than 
carload  shipments,  the  rules  and  regulations  applicable 
to   each   classification  being  in  a  few  instances   similar. 

The  conditions  and  the  requirements  upon  which  the 
present  classification  is  based  are  of  an  entirely  different 
character,  as  the  new  issue  governs  all  traffic,  through 
and  local,  between  all  stations  of  the  roads  within  the 
territory  described. 

It  may  be  interesting  to  learn  the  methods  under 
which  an  article  may  receive  its  place  in  the  classifica- 
tion. This  will  be  here  briefly  explained  for  the  official 
classification,  which  is  applied  exclusively  by  carriers 
covering  more  tonnage  than  any  of  the  other  classifica- 
tions in  use. 


74 

The  official  classification  committee  is  composed  of 
twelve  general  and  assistant  general  freight  agents, 
representing  twelve  of  the  principal  lines  in  the  territory 
using  that  classification.  While  the  twelve  men  referred 
to  are  the  official  representatives  of  only  twelve  rail- 
roads, the  official  classification  governs  and  is  used  by 
one  hundred  and  fifty  different  railroads  the  total  mileage 
of  which  is  65,000.  Over  50  per  cent,  of  the  total  ton- 
nage of  all  roads  in  the  United  States  is  carried  under 
the  official  classification. 

This  class  committee  was  created  for  the  purpose  of 
defining  the  classes  under  which  freight  shall  be  trans- 
ported by  the  various  lines  within  the  territory  above 
described. 

What  is  known  as  the  "  through  "  business  of  the  Trunk 
Lines  Association  and  the  Central  Traffic  Association  is 
arranged  for  by  a  joint  committee  composed  of  members 
of  the  two  associations  named,  and  this  joint  committee 
appoints  the  classification  committee,  which  latter  com- 
mittee has  a  permanent  chairman.  All  applications  bear- 
ing upon  changes  or  additions  in  the  classifications  may 
be  submitted  in  writing  at  any  time,  either  by  the  rail- 
roads or  shippers,  to  the  chairman  of  the  classification 
committee,  together  with  the  various  reasons  in  support 
of  the  application  for  such  changes. 

The  chairman  acknowledges  the  receipt  of  every  such 
application,  following  which  an  investigation  is  made  as 
to  the  value,  bulk,  and  various  other  features  relating  to 
the  article  for  which  a  change  is  sought  and  which  are 
usually  considered  when  making  a  classification. 

Upon  the  conclusion  of  the  investigation  the  chairman 
renders  a  report  to  the  classification  committee  for  its 
consideration  and  action,  with  a  recommendation  for  or 


75 

against  the  granting  of  the  appHcation.  The  chairman 
may  make  temporary  rulings  regarding  the  classification 
of  any  article,  but  the  final  classification  of  all  articles 
is  only  obtained  by  vote  of  the  roads  in  joint  committee. 

Official  classification  No.  i  was  issued  April  i,  1887, 
and  may  be  said  to  have  been  largely  experimental,  as  it 
was  hardly  to  be  expected  that  the  commerce  of  so  large 
an  area  could  at  once  be  made  to  conform  to  the  new 
conditions  resulting  from  the  consolidation  of  the  widely 
different  classifications  formerly  in  use. 

Official  classification  No.  2  was  issued  on  July  15,  iSS/* 
The  revisions  in  the  classifications  have  necessitated  fre- 
quent issues  of  this  publication,  the  last  being  No.  13,  of 
January,  1894.  Since  1887  there  have  been  thirteen 
issued,  and  in  view  of  this  fact  one  can  conceive  what 
differences  occurred  and  what  changes  were  necessitated. 

With  these  facts  presented  it  is  hoped  that  the  student 
or  reader  may  have  a  conception  of  the  construction  of 
freight  classification. 


CONSTRUCTION  OF  FREIGHT  SCHEDULES 

OR  TARIFFS. 


All  freight  tariffs  should  ser\^e  to  describe  the  rate 
they  contain.  Considering  the  vast  number  of  railroads 
in  the  countrj'-  and  their  methods  of  constructing  tariffs,  it 
would  hardly  be  practicable  to  give  even  a  minute  account 
of  their  way  of  construction. 

There  are  many  tariffs  in  effect  which,  to  a  greater  or 
less  degree,  are  defective  and  imperfect  in  their  construc- 
tion, and  do  not  present  the  rates  or  the  rules  and  regula- 
tions governing  the  same  with  clearness.  The  printing 
of  tariffs  is  one  of  the  main  features  in  the  construction; 
they  should  be  printed  in  large,  plain  t>'pe,  and  in  such  a 
manner  that  they  can  be  readily  understood  and  read. 
Many  roads  throughout  the  country  use  the  various 
duplicating  processes,  such  as  the  hectograph,  mimeo- 
graph, t>'pewriter  type,  etc. 

Much  can  be  said  against  these  methods ;  they  will 
fade  in  the  light  and  in  a  httle  time  cannot  be  deciphered, 
and  from  their  vague  construction  do  not  give  sufficient 
information  for  a  clear  understanding  of  their  application. 
Every  schedule  should  plainly  state  the  places  between 
which  the  rates  apply.  Tariffs  are  generally  issued  by 
the  road  on  which  the  traffic  originates. 

It  frequently  occurs  that  a  road  will  issue  a  tariff  from 
points  on  another  road  to  points  on  its  own  line,  and  such 
a  tariff  will  make  no  reference  to  the  initial  connectincr 
road  other  than  giving  the  name  of  the  point  from  which 
the  traffic  originates. 

;6 


77 

The  title  of  the  tariff"  will  in  no  way  indicate  that  it  is 
a  joint  tariff,  and  in  many  cases  nothing  whatever  appears 
showing  that  connecting  roads  have  authorized  the  tariff". 
This  should  be  done  in  every  particular  case.  When  a 
tariff"  is  issued  between  points  on  different  roads  showing 
rates  on  various  classes  on  basis  other  than  combination 
of  local  rates,  such  a  tariff  is  a  joint  tariff,  and  its  title 
should  read  "joint  through  tariff  on  general  merchandise." 
If  it  only  covers  one  commodity  the  name  of  that  commo- 
dity should  be  prominently  shown,  and  should  it  become 
necessary  to  issue  tariffs  in  different  directions  they 
should  read,  "joint  west-bound  freight  tariff,"  or  "joint 
east-bound  freight  tariff,"  as  the  case  may  be.  If  the 
tariff  is  only  to  cover  one  commodity,  the  name  of  the 
commodity  should  be  prominently  shown  in  the  title  of 
the  tariff;  for  example,  "joint  east-bound  freight  tariff  on 
lumber." 

When  using  the  word  "joint  "  it  should  only  be  applied 
to  titles  of  tariffs  which  are  joint  tariffs  in  fact,  and 
omitted  from  any  other  tariffs.  In  constructing  freight 
tariffs  to  apply  between  points  on  the  same  road,  they  might 
be  called  "  freight  tariff  on  general  merchandise  between 
local  stations,"  "  freight  tariff  on  general  merchandise," 
or  "  freight  tariff  on  coal." 

The  front  or  title  page  of  a  tariff  should  make  a  clear 
distinction  as  to  whether  it  be  an  individual  tariff",  that  is, 
to  only  cover  business  betw^een  local  points,  or  whether 
it  is  a  joint  tariff.  The  front  or  title  page  of  tariffs  should 
contain  only: 

First: — Number  of  tariff! 

Second : — Reference  in  detail,  by  title  or  number,  to 
all    tariffs   which   are    superseded,   indicating    in   what 


78 

manner  the  new  tariff  changes  the  rates  in  the  previous 
tariffs  referred  to. 

Third: — Title  of  tariff;  traffic  covered. 

Fourth : — Name  of  road,  if  an  individual  tariff,  or 
names  of  all  roads  uniting  in  making  the  rate  if  a  joint 
tariff  In  the  latter 'case  suitable  wording  should  be 
used  to  indicate  the  assent  of  all  roads  to  the  rates  con- 
tained in  such  tariff,  as  set  forth  in  the  ninth  requirement 
below. 

Fifth  : — Date  of  issue. 

Sixth  : — Date  effective. 

Seventh : — Note  indicating  the  route  and  names  of 
connections. 

Eighth  : — Name  and  address  of  the  official  issuing  the 
tariff 

Ninth : — Appropriate  certification  of  the  rates  by  the 
officers  authorizing  their  publication.  For  example, 
"  the  following  officers  of  the  above-named  roads  concur 
in  the  rates  herein  given;"  following  this  the  names  of 
the  proper  officials. 

The  form  as  presented  shows  the  title  page  of  a  joint 
■freight  tariff  which  contains  all  the  information  requisite 
to  the  foregoing  regulations. 


79 

Inter-State. — To  be  Posted  in  Two  Places  at  Each 

Freight  Station. 


THE   POTAMAC    AND    ROANOKE   RAILROAD 

COMPANY. 


Baltimore  &  Ohio  R.  R.  Company, 
Wilmington  and  Northern  R.  R.  Company, 
Philada.  and  Erie  R.  R.  Company, 
New  York,  Lake  Erie  &  Western  R.  R.  Co. 


ORDER  No.  221. 


Joint  Class  Rate  Tariff. 


Applying  in  both  directions  between  stations  on  the 
Potomac  &  Roanoke  K.  R.,  Baltimore  &  Ohio  R.  R. 
and  stations  on  the  New  York,  Lake  Erie  &  Western 
R.  R.  Company  via  Philadelphia  &  Erie  R.  R.  Co.,  in 
effect  December  ist,  1890. 

The  rates  named  in  this  tariff  do  not  apply  on  coal,  coke  or  fruit. 

Under  this  tariff,  when  freight  is  to  be  loaded  by  consignor  or  unloaded 
by  consignee,  one  dollar  (|i.oo)  per  car  per  day  or  fraction  thereof,  for 
delay  beyond  forty-eight  hours  in  loading  or  unloading,  will  be  added  to 
the  rates  named  herein  and  constitute  a  part  of  the  total  charges  to  be 
collected  by  the  carrier  on  the  porperty ;  except,  however,  when  in  con- 
flict with  Car  Service  Association  (or  local  regulations  at  shipping  point  or 
destination),  in  which  case  such  car  service  association  or  local  regulations 
shall  prevail. 

The  following  officers  of  the  above-named  roads 
concur  in  the  rates  herein  given. 

Charles  J.  Brown.        Walter  Johnson,        Walter  Dietrich, 
G.  F.  A.,  P.  &  R.  R.  R.,    G.  F.  A.,  B.  &  O.  R.  R.,  G.  F.  A.,  W.  &  N.  R.R., 
Philada.,  Pa.  Pittsburg,  Pa.  Chester,  Pa. 

Thomas  II.  Bowne.  Jr.,  John  Eckert, 

G.  F.  S..  P.  &  E.  R.  R.  Co.,  G.  F.  A.,  N.  Y.  L.  E.  &  W.  R.  R., 

Harribburg,  Pa.  New  York,  N.  Y. 

Philadelphia,  Pa.,  June  20th,  1891. 


8o 

In  the  arrangement  of  the  points,  classes  and  com- 
modities should  be  systematic,  and  the  language  chosen 
for  the  purpose  of  expressing  as  to  whether  the  rates 
may  be  used  in  one  or  more  directions  should  be  definite. 
There  is  a  considerable  amount  of  irregularity  in  the 
publishing  of  tariffs;  simply  because  many  roads  where 
the  duties  of  the  officers  are  divided  so  that  one  agent 
will  only  be  interested  in  through  traffic,  with  authority 
to  make  rates,   while  the   local  traffic  is  in  charge  of 
others.     The  conditions  surrounding  the  traffic  covered 
by  the  through  rates  would  not  necessarily  be  known  to 
the  officers  in  charge  of  local  traffic.     Changes  made  in 
the  through  rates  may  therefore  not  come  to  their  knowl- 
edge.    In  view  of  this  fact  it  often  happens  that  reduc- 
tions are  made  to  terminal  points  without  corresponding 
changes  to  the  intermediate  points. 

The  authority  for  the  publication  of  joint  tariffs  should 
always  be  shown,  and  what  carriers  and  officials  are 
responsible  for  their  correctness  and  compliance  with  the 
act  to  regulate  commerce,  and  they  should  indicate  the 
routes  over  which  rates  are  applicable.  It  frequently 
occurs  that  the  route  by  which  the  traffic  is  to  be  carried 
is  omitted,  thereby  making  its  application  doubtful  owing 
to  the  absence  of  this  valuable  information  as  to  the 
routing  of  the  traffic. 

A  large  portion  of  the  roads  issue  what  are  termed 
distance  tariffs  and  distance  tables,  applicable  to  local 
traffic.  These  tariffs  show  rates  upon  the  various  classes 
and  commodities  for  different  mileage  groups,  generally 
of  five  or  ten  miles.  The  distance  table  shows  the  names 
of  the  various  stations  and  the  distance  from  each  to  all 
other  stations.  In  some  cases,  however,  they  are  com- 
bined, and  in  such  events  they  are  very  often  so  con- 


8i 

structed  that  it  is  not  clear  how  one  should  proceed  to 
obtain  a  particular  rate.  Ordinarily,  to  obtain  a  rate 
between  any  two  stations  under  these  tariffs,  reference 
must  be  first  made  to  the  distance  table  for  the  mileatre. 
and,  second,  to  the  distance  tariffs  for  the  corresponding 
mileage.  If  a  rate  is  sought  for  a  classified  article  the 
classification  must  be  consulted. 

These  three  papers,  namely,  the  distance  tariff,  distance 
table  and  the  classification,  are  all  necessary  to  ascertain 
the  rate. 

In  constructing  tables  of  this  character  care  should  be 
given  to  the  fact  of  clearness,  system  in  the  compilation, 
and  should  not  in  any  sense  be  complicated,  for  example : 

TO  BE  POSTED. 


The  Potomac  and  Roanoke  R.  R.  Co.  and  Branches. 


Philadelphia   and  Baltimore,    Baltimore   and   Potomac, 
Harrisburg  and  Lancaster  and  Reading  and  CarHsle. 


GENERAL  FREIGHT  DEPARTMENT. 


Freight  Distance  Table. 


Order  No.  A  12  of  1880. 
Station. 


In  Effect  February  2ist,  1880. 


Distances  as  given  herein  are  constructed  for  the  pur- 
pose of  arriving  at  freight  rates  only,  and  must  not  be 


82 

used  for  any  purpose  other  than  in  connection  with 
freight  tariffs.  Stations  and  sidings  for  which  no  dis- 
tances have  been  provided  will  take  the  distance  apply- 
ing to  the  next  station  beyond. 

Charles  J.  Bowne,  G.  F.  A. 
Samuel  Dietrich,  G.  F.  A. 

Thiladelphia,  February  1st,   iSSo. 

In  the  adoption  of  tariffs  of  other  roads,  associations, 
etc.,  the  road  receiving  such  tariffs  for  the  purpose  of 
announcing  to  the  public  rates  from  their  own  stations, 
should  regard  such  tariffs  the  same  as  tariffs  of  their 
own  issue,  and  should  be  provided  with  a  supplemental 
title  page,  numbered  and  dated,  showing  plainly  the 
names  of  the  stations  from,  to,  or  between  which  the 
rates  in  the  adopted  tariff  will  apply ;  and  the  title  page 
should  be  otherwise  arranged  after  the  form  of  their 
own  tariffs.  The  manner  of  abrogating  and  changing 
tariffs  varies  in  many  cases.  Some  are  complete  in  their 
purpose  while  others  are  indefinite.  There  is  a  variety 
of  expressions  used  for  this  purpose,  some  of  which  are 
as  follows : 


Abrogating  all  previous  tariffs. 

Abrogating  all  conflicting  rates. 

Former  rates  conflicting  are  hereby  withdrawn. 


This  is  not  considered  a  very  satisfactory  form  or  in 
any  sense  complete,  and  in  many  instances  is  misleading. 
A  more  definite  form  and  one  that  will  meet  all  the 
requirements,  is  as  follows :  If  we  were  to  cancel  order 
No.  221  and  instead  issue  another,  our  clause  would 
read: 


83 

"Order  No.  222  superseding  Order  No.  221  of 
December  ist,  1890,  and  supplements."  In  this  case 
order  No.  222  would  take  its  place,  and  should  any 
one  have  occasion  to  refer  to  this  tariff  the  information 
is  at  hand. 

Numbering  tariffs  is  a  very  important  feature  to 
remember;  while  there  are  a  variety  of  systems  through- 
out the  country,  some  are  complete  and  others  not 
worthy  of  mention.  To  have  a  correct  system  is 
important.  A  number  should  serve  as  a  part  of  the 
title  of  the  tariff  and  should  be  plainly  stated  for  the 
purpose  of  identifying  each  tariff,  and  further,  for  the 
purpose  of  abrogating  or  amending  other  tariffs.  The 
numbering  should  be  systematic,  and  references  to  the 
numbers  should  be  plain  and  complete  to  be  of  service 
to  all  making  use  of  the  tariff.  Where  roads  issue  a 
series  of  tariffs  they  are  characterized  by  letters,  as  for 
example:  "Order  A-221  of  December  15th,  1890,  and 
so  on." 

Tariffs  are  of  various  sizes.  Many  are  larger  than 
they  need  be,  while  others  are  frequently  on  sheets  so 
small  that  much  of  the  information  necessary  to  under- 
stand their  application  is  omitted.  The  size  that  is  fast 
becoming  a  standard,  and  is  found  large  enough  to 
embrace  all  the  detail  necessary  to  properly  present 
the  rates,  is  on  sheets  eleven  inches  long  by  eight  inches 
wide. 

When  constructing  a  tariff  the  unity  of  quantity 
should  always  be  given,  so  as  one  can  determine  the 
quantity  for  which  the  rates  are  named,  such  as  "per 
one  hundred  pounds,"  per  barrel,  per  ton,  per  car.  If 
the  student  will  follow  the  foregoing  suggestions  he  will 
have  very  little  trouble  to  meet  all  the  requirements 
requisite  in  tariff  construction. 


PERCENTAGE  TABLES. 


The  percentage  tables  are  used  in  apportioning  revenue 
accruing  from  the  transportation  of  freight  and  the  con- 
veyance of  passengers. 

They  may  be  characterized  as  "joint  percentages," 
that  is  to  say,  percentages  applicable  in  dividing  business 
between  two  or  more  companies, and  "local  percentages," 
for  the  purpose  of  dividing  the  revenue  of  the  home  com- 
pany. Percentage  tables  are  of  different  construction;  some 
are  made  up  on  an  actual  mileage  basis  and  others  on  a 
constructive  principle,  commonly  termed  blocks,  of  so 
many  miles  each.  In  the  establishment  of  these  tables  it  is 
in  some  particulars  identical  to  rate  construction.  One  road 
will  want  a  certain  mileage  to  a  certain  given  point,  which 
may  be  several  miles  greater  than  the  actual  distance, 
and  the  other  roads  to  receive  but  actual  miles.  Another 
principle  of  construction  is  the  grouping  system  ;  that  is 
to  say,  so  many  points  within  a  certain  limit  of  miles  will 
take  the  same  percentage  as  is  given  to  that  limit;  as  for 
example : — There  are  four  stations  within  a  distance  of 
20  miles,  A,  B,  C  and  D.  If  we  were  to  take  the  actual 
miles  and  ascertain  the  percentage,  station  D  would  be 
the  largest,  but  the  difference  to  the  intermediate  points 
being  so  small  it  is  deemed  practicable,  for  the  sake  of 
simplifying  and  lessening  the  work  of  prorating  revenue, 
to  give  the  same  percentage  to  the  intermediate  points  as 
the  ultimate  point.  Local  percentages  are  computed  on 
an  actual  mileage  principle. 

To  ascertain  the  percentage  relationship  between  two 

84 


85 

points  on  separate  roads,  our  first  step  would  be  to  find 
what  distance  these  points  are  fiom  the  nearest  junction 
point  with  that  road.  Say  the  distance  from  a  junction 
point  to  A  is  forty-five  miles  and  B  is  distant  from  the 
same  point  forty-nine  miles,  the  percentage  relationship 
would  be : 

A's  mileage  is  45  miles  or  45 — 94-47,  9  per  cent. 

B's        "        "  49  "     49—94-52,  I 

The  solution  is,  what  percentage  forty-five  miles  is  of 
the  total  distance  or  ninety-four  miles.  If  forty-five  miles 
is  some  percentage  of  ninety-four  miles,  then  ninety-four 
miles,  multiplied  by  some  percentage,  will  equal  forty-five 
miles.  If  ninety-four  miles,  multiplied  by  some  percent- 
age, equals  forty-five  miles,  the  percentage  equals  forty- 
five  miles  divided  by  ninety-four  miles,  the  total  distance, 
or  forty-seven  9-10  per  cent.  The  rule  is,  divide  the 
relative  distances  by  the  aggregate  and  the  result  will  be 
the  percentage. 

If  the  reader  would  follow  the  above  rule,  no  matter 
how  many  roads  were  sharing  in  the  revenue,  the  relative 
percentage  would  be  obtained  on  that  principle. 

It  very  often  occurs  that  an  arbitrary  amount  is  to  be 
deducted  before  the  total  revenue  is  apportioned  between 
the  several  roads,  and  when  this  is  the  case  this  amount  is 
first  deducted  and  the  remainder  divided  on  agreed  per- 
centages ;  as  for  example  : 

Three  roads,  A,  B,  and  C,  and  the  amount  to  be  divided 
between  them  is  ;^24.oo.  A's  proportion  is  thirty  per 
cent.,  plus  arbitrary  one  cent  per  one  hundred  pounds. 
B's  proportion  is  forty  per  cent.,  and  C's  proportion  is 
thirty  per  cent.,  plus  three  cents  per  two  thousand 
pounds.  The  amount  that  each  would  receive  is  as 
follows : 


86 

The  shipment  reads  24,000  pounds  at  10  cents  per 
100  pounds  or  $24.00. 

A's  proportion  30  per  cent.,  of  $21.24  plus  arbitrary. 

$2.40  or  a  total  of  $8.77 
B's  "  40       "  "    $21.24  58.50 

C's  "  30       "  "    $21.24  plus  arbitrary'. 

$0.36  or  a  total  of  $6.73 

Total  $24.00 

All  percentage  tables  are  practically  based  on  the  fore- 
going principles  and,  with  this  brief  explanation  it  is 
hoped  that  the  reader  has  been  given  sufficient  informa- 
tion to  enable  him  to  understand  a  table  in  an  intelligent 
manner. 


RECEIVING,  FORWARDING  AND  DELIVER- 
ING PROPERTY. 


We  have  now  come  to  consider  the  requirements 
which  are  necessary  in  the  moving  of  property.  This 
question  of  transportation  is  one  of  the  weightiest  topics 
in  *  connection  with  conducting  transportation.  The 
essential  principles  are  numerous,  and  if  it  were  possible 
to  invade  all  of  them  in  this  chapter,  it  would  expand  to 
an  ordinary  book  of  itself;  however,  let  us  only  con- 
sider those  which  are  absolutely  necessary. 

If  the  reader  had  a  box  of  dry  goods  which  he  de- 
sired to  ship  he  would  be  compelled  to  furnish  a  shipping 
order,  signed  by  himself,  giving  full  particulars  of  the 
consignment;  that  is  to  say,  a  correct  list  of  the  articles, 
with  marks,  and  the  name  of  the  consignee  and  destina- 
tion of  the  shipment  in  full,  including  the  State  or  Terri- 
tory and  the  county  therein.  This  document  is  for  the 
guidance  of  the  parties  shipping  the  property,  as  no 
verbal  shipping  directions  are  accepted.  In  turn  for  this, 
the  company's  agent  gives  a  shipping  receipt  if  it  is  a 
straight  consignment,  which  should  be  an  exact  copy  of 
the  forwarding  authority.  This  shipping  receipt  is  not 
negotiable,  but  simply  an  acknowledgement  for  the  pro- 
perty as  described  in  the  body  of  the  receipt.  Should 
the  reader  desire  to  ship  this  box  of  dry  goods  "  to 
order,"  or  to  his  order,  notify  the  consignee ;  that  is  to 
say,  deliver  the  freight  only  upon  the  presentation  and 
surrender  of  the  original  bill  of  lading  properly  endorsed 
by  him.  It  is  necessar)'-  to  secure  a  bill  of  lading,  which 
is  a  binding  contract,  as  per  conditions  within  the  body  of 

8/ 


88 

bill  of  lading,  between  him  and  the  receiving  carrier,  and 
is  of  the  same  respective  value  as  bankers'  drafts  or  bills 
of  exchange. 

This  bill  of  lading  can  only  be  obtained  upon  the 
surrender  of  the  original  shipping  receipt,  properly  en- 
dorsed by  the  company's  authorized  agent.  The  box  is 
then  weighed,  and  the  weight  thereof,  together  v/ith  the 
number  of  car  into  which  it  has  been  placed,  is  noted  on 
the  shipping  order,  when  it  is  ready  to  be  manifested  or 
way-billed,  as  no  shipment  is  allowed  to  go  forward 
without  a  way-bill. 

This  way-bill  is  a  memorandum  of  the  consignment, 
together  with  a  full  and  complete  shipping  directions. 
It  is  made  directly  from  the  shipping  order  or  forwarding 
authority,  which  should  give  all  particulars  of  the  con- 
signment, the  number  and  initial  of  car  into  which  the 
property  or  box  has  been  loaded,  the  record  of  the  check- 
ing into  such  car,  and  the  point  to  which  the  car  is 
carded.     As  for  example  : 

One  box  of  dry  goods  from  Cayuga,  Pa.,  to  New 
York,  consigned  to  Mr.  John  Brown.  The  way-bill  would 
read  thus : 


89 


JOINT  FREIGHT  MDSE.  WAY-BILL. 


Car  No.  23,  Initial  P.  &  R. 


Way-Bill  No.  123. 


From  Cayuga,  Pa.,  to  New  York 

Via  Wayne  and  Zealand  Junction. 


Consignee  and 
Destination. 

Articles. 

Weight. 

Rate. 

Freight. 

Advances. 

Prepaid. 

Mr.  John  Brown 
New  York 

one  box 

dry 

goods 

300  lbs. 

100 

$2.25 

75c. 

The  revenue  would  divide 


ROADS 

A.  . 

B.  . 

C.  . 


Apportionment 

PER  CENT. 
.     .     .  20fo   .     . 

.  .  .  40^  .  . 
.  .  .  40%  .  . 


Total, 


AMT. 

$0  45 

$0  90 

^o  90 

$2    25 


The  reader  will  observe  that  there  are  three  columns 
provided  for  in  this  way-bill ;  namely,  Freight,  Advances, 
Prepaid. 

In  the  column  "freight "  are  extended  the  total  charges 
between  points  from  and  to  which  way-bill  is  made. 

In  the  column  "  advances  "  are  extended  the  amounts 
paid  out  by  the  forwarding  station  as  back  charges ;  that 
is  to  say,  when  a  shipment  is  received  from  a  connecting 
road  at  a  junction  point  the  agent  of  the  receiving  road 
pays  all  the  charges  against  the  shipment  up  to  that 
junction,  and  they  are  termed  advance  charges,  which  is 
a  credit  to  the  forwarding  agent,  as  he  advanced  the 
money. 

In  the  column  "prepaid"  are  extended  the  amounts 


90 

collected  by  forwarding  station  to  apply  on  the  ship- 
ment. When  a  shipment  is  prepaid  a  memorandum  is 
noted  on  the  way-bill,  explaining  fully  the  point  to 
which  the  prepayment  is  to  cover,  as,  for  instance: 
"prepaid  to  New  York,"  or  "prepaid  to  Boston,  Mass.," 
and  is  a  debit  to  forwarding  station  and  a  credit  to  the 
receiving  agent  or  road. 

The  amount  in  "freight"  and  "  advances"  columns  are 
a  charge  to  the  receiving  agent  or  road ;  that  is  to  say, 
all  charges,  whether  freight  or  advance  charges,  appear- 
ing on  the  way-bill  received  is  chargeable  to  the  agent 
receiving  it.  The  way-bill  is  now  made  and  there  must 
be  some  provision  made  for  the  proper  handling  of  the 
car  into  which  the  box  was  placed  so  that  the  property 
will  reach  its  correct  destination.  This  is  provided  for 
by  issuing  memorandum  manifests  or  card  way-bills, 
which  contain  the  same  instructions  as  the  regular  way- 
bill, viz. :  forwarding  point  and  date,  number  and  initial 
of  car,  contents,  name  of  consignee,  and  ultimate  desti- 
nation. The  car  is  carded  with  regular  ticket  which 
gives  the  forwarding  point  and  destination,  date,  route, 
contents,  car  number  and  the  initial. 

The  car  is  then  sealed  and  together  with  the  card  way- 
bill is  handed  over  to  the  train  conductor,  who  makes  an 
examination  that  no  discrepancies  exist,  and  the  car  is 
carried  to  its  destination. 

When  the  car  reaches  its  destination  the  train  con- 
ductor unloads  the  freight  and  delivers  it  to  the  agent  at 
that  point  with  the  manifest.  The  agent  receiving  the 
property  takes  a  record  of  the  shipment  and  records  it 
in  a  ledger  or  freight  receipt  book,  and  at  the  same  time 
making  out  a  bill  against  the  consignee  which  is  called 
an  expense  bill. 


91 

Upon  the  arrival  of  property  notice  is  sent  to  the  con- 
signee, or  the  parties  to  be  notified.  The  following  rules 
are  generally  observed  in  the  delivering  of  property: 

When  consigned  to  a  certain  party,  the  freight  is 
delivered  to  that  party  only,  or  upon  his  written  order. 

When  consigned  to  one  party  "  in  care  of"  a  second 
party,  the  freight  is  delivered  to  the  second  party  only, 
or  upon  his  written  order. 

When  consigned  to  one  party,  "notify  a  second 
party,"  the  second  party  is  notified,  but  delivery  of  the 
freight  is  only  made  upon  the  presentation  and  surrender 
of  the  original  shipping  receipt  or  bill  of  lading,  properly 
indorsed  by  the  first  party. 

When  consigned  simply  "  to  order,"  or  "  to  order  of 
shipper,"  the  freight  is  only  delivered  upon  the  presenta- 
tion and  surrender  of  the  original  shipping  receipt  or  bill 
of  lading,  properly  indorsed  by  the  party  to  whom  it  was 
issued. 

When  consigned  "to  order"  of  a  certain  party,  the 
freight  is  only  deliv^ered  upon  the  presentation  and 
surrender  of  the  original  shipping  receipt  or  bill  of 
lading,  properly  indorsed  by  the  party  to  whose  order 
the  property  is  consigned. 

When  consigned  simply  "  to  order,"  or  "  to  order  of 
shipper,  notify  a  certain  party,"  the  said  party  is  notified, 
and  the  freight  is  delivered  only  upon  the  presentation 
and  surrender  of  the  original  shipping  receipt  or  bill  of 
lading,  properly  indorsed  by  the  party  to  whom  it  was 
issued. 

When  consigned  "to  order  of  one  party,  notify  a 
second  party,"  the  second  party  is  notified,  but  the  pro- 
perty is  not  delivered  until  the  original  shipping  receipt 


or  bill  of  lading,  properly  indorsed  by  the  first  party,  is 
presented  and  surrendered. 

No  freight  or  any  portion  of  a  consignment  can  be 
removed  from  a  station  until  all  of  the  charges  are  paid, 
and  when  delivering  property  a  delivering  receipt  is 
taken,  which  indicates  the  station  at  which  delivery  is 
made,  the  date  and  exact  time  of  delivery,  full  reference 
to  billing,  the  name  and  address  of  consignees,  articles, 
marks,  weight,  charges,  etc.,  as  shown  b}'  the  corres- 
ponding expense  bill,  and  the  condition  of  the  property 
when  delivered. 

We  now  come  to  the  accounting  for  the  shipment. 
As  previously  referred  to,  every  agent  is  charged  with 
the  amount  on  all  way-bills  received  by  him  for  collec- 
tion, and  all  amounts  collected  to  prepay  on  shipments 
forwarded,  and  all  cash  remitted  to  the  treasurer,  and  all 
money  paid  out  for  advance  charges,  if  he  be  a  junction 
agent,  are  credits  to  him.  The  tables  on  pages  91  and  92 
will  show  an  exhibition  of  a  "Station  and  Cash  Account :" 


93 


bo  Daily  Credits 


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95 

From  the  foregoing  illustration  the  reader  can  see 
how  and  under  what  principle  the  accounts  at  a  station 
are  kept.  This  exhibit  is  made  out  daily.  Some  roads 
follow  this  rule,  while  there  are  others  which  only 
require  a  weekly  exhibit,  and  others  a  monthly  report. 

This  report,  together  with  a  report  of  all  way-bills 
received  and  tickets  sold,  and  a  report  of  all  way-bills 
issued,  are  forwarded  daily  to  the  auditor,  for  recording. 

The  way-bills  appearing  on  the  report  of  way-bills 
issued  are  recorded  in  a  ledger  or  freight  record,  as 
some  roads  term  it,  consecutively  in  station  order ;  that 
is  to  say,  from  the  initial  point  to  termini.  The  daily 
exhibit  is  also  recorded  in  a  ledger,  or,  as  some 
have  termed  it,  a  station  agent  record,  and  the  way-bills 
and  total  of  each  on  the  report  of  way-bills  received  are 
checked  against  the  way-bills  and  totals  of  way-bills 
forwarded.  If  they  both  agree  the  agent  is  charged 
with  that  amount.  At  the  close  of  every  month  these 
records  are  summarized  and  if  the  totals  in  the  freisfht 
record  agree  with  the  total  amount  to  be  collected  on 
way-bills  received  his  accounts  balance  so  far  as  that 
portion  of  his  account  is  concerned,  and  he  is  charged 
with  that  amount.  The  sales  of  tickets  are  accounted 
for  in  a  somewhat  similar  manner ;  the  agent,  at  the 
close  of  every  month,  renders  a  monthly  statement 
which  shows  a  complete  record  of  all  tickets  sold  from 
his  station,  giving  the  beginning  and  closing  numbers, 
to  what  station  sold,  the  total  number,  rate  and 
amount.  Before  this  report  is  checked,  however,  all 
the  tickets  sold  from  a  station  are  assorted  according  to 
the  stations  to  which  they  are  sold  and  arranged  in 
consecutive  order,  the  lowest  number  on  top. 

The  report  is  then  checked,  and  if  the  total  number  of 


96 

tickets  shown  on  the  report  agree  with  the  number  on 
hand  the  report  is  correct  and  the  agent  is  charged  with 
that  amount.  This  process  is  followed  month  after 
month. 


REVENUE  AND  EXPENSES. 


The  whole  structure  of  the  system  of  collecting  freight 
revenue,  holding  accountable  all  agents  who  assess  it  and 
collect  it,  dividing  it  in  the  agreed  proportion  between 
the  railroads  over  which  it  passes,  and  the  tabulating  of 
the  immense  mass  of  statistics,  which  are  kept  to  show 
separately  the  quantities  of  freight  received  from  and 
delivered  to  connecting  lines,  and  every  possible  class 
and  variety,  by  route,  and  to  and  from  point  of  departure 
and  destination,  is  founded  upon  a  paper  called  the  way- 
bill, neither  the  magnitude  nor  the  minute  elaboration  of 
the  system  involved  in  a  way-bill  could  be  adequately 
described  within  limits. 

The  theory  of  a  way-bill  is  that  no  shipment  must 
move  without  one,  which  gives  a  full  description,  showing 
the  points  of  departure  and  destination,  whether  it  has 
been  prepaid  or  to  be  collected  at  destination,  etc.,  and 
not  only  must  a  way-bill  accompany  a  shipment,  but  a 
duplicate  of  it  must  be  sent  to  the  office  of  the  auditor. 

Before  making  an  entry  of  the  way-bill  received  its 
extended  figures  are  first  checked  by  a  rate  clerk,  who  is 
kept  constantly  supplied  by  the  traffic  department  with 
all  current  rates,  classifications,  and  percentage  tables 
by  W'hich  through  freight  is  divided.  It  has  been 
the  general  practice  to  record  all  way-bills  immediately 
and  directly  from  the  reports  received  from  the  agents 
making  them,  and  afterwards,  if  an  error  was  found,  a 
correction  was  issued  raising  or  reducing  the  charges  as 

97 


98 

the  case  may  be.  All  way-bills  are  recorded  consecutively 
and  in  station  order.  After  the  business  of  the  month  is 
dosed,  the  records  into  which  all  the  way-bills  are 
recorded  are  summarized,  the  totals,  which  represent  a 
debit  against  the  receiving  agent,  are  taken  off  on  an 
abstract;  that  is  to  say,  the  total  of  all  the  way-bills 
received  at  one  particular  station  and  from  all  stations. 
The  grand  total  is  checked  against  the  agent's  account  of 
way-bills  received  and  they  should  agree.  The  theory  is 
that  all  way-bills  received  must  equal  the  amount  of  all 
way-bills  forwarded.  The  records  are  then  turned  over 
to  the  statistician  who  separates  the  various  classes  of 
freight  and  the  weight  thereof,  from  what  point  and  to 
what  point,  what  connecting  line  received  from  and 
delivered  to.  When  the  total  weight  in  pounds  has  been 
found,  it  is  reduced  to  tons  and  tons  one  mile;  that  is  to 
say,  how  many  miles  a  ton  was  carried,  and  is  arrived  at 
by  multiplying  the  tons  by  the  difference  of  miles  between 
stations. 

All  the  tickets  that  are  sold  are  taken  up  by  the  train 
conductor  who  forwards  them  to  the  auditor.  These 
tickets  are  assorted  according  to  the  station  selling  them, 
and  at  the  close  of  the  month's  business  the  agent  will 
forward  to  the  auditor  a  report  showing  in  detail  the  num- 
ber of  tickets  sold,  price,  and  to  what  point. 

These  reports  are  checked  to  verify  the  extension  and 
price,  and  the  number  sold  is  checked  with  the  number 
received  from  the  train  conductor,  which  should  agree. 
In  ascertaining  the  total  number  of  passengers  carried, 
and  the  total  number  of  passengers  carried  one  mile, 
reference  is  made  to  the  agent's  report,  which  gives  the 
total  tickets  sold,  representing  the  total  passengers  car- 
ried; and  the  multiplying  of  this  total  by  the  difference 


99 

of  miles  between  stations  will  give  the  passengers  carried 
one  mile. 

All  disbursements  are  taken  account  of  by  and  are 
under  the  charge  of  an  auditor  of  disbursements.  All  bills 
for  the  purchase  of  the  material  and  other  supplies  for  the 
road  are  received  by  him  and  verified  as  to  their  correct- 
ness, as  well  as  any  other  bill  which  demands  an  outlay 
of  money  or  is  simply  a  department  bill.  These  bills  are 
recorded  in  a  record  called  a  bills  payable  book,  or 
voucher  record,  and  given  a  number.  When  they  are 
found  to  be  correct  a  voucher  is  drawn  for  the  amount 
of  such  bill,  which,  after  the  endorsement  of  the  author- 
ized officers,  becomes  a  bank  draft  and  is  negotiable. 

Every  bill  must  have  a  charge  to  off-set  the  amount 
disbursed.  The  accounts,  which  are  numerous,  cannot 
be  given  an  adequate  description,  owing  to  limited  space  ; 
but  let  us  consider  a  few  of  them. 

There  are  eight  general  accounts  in  disbursement 
account  chargings ;  namely,  general  expenses,  traffic  or 
commercial  departm.ent  expenses,  maintenance  of  way, 
maintenance  of  engines,  maintenance  of  cars,  conducting 
transportation,  construction  and  equipment  and  open 
account.  These  general  accounts  are  subdivided  into 
several  detailed  accounts  or  sub-accounts,  and  when  a 
bill  is  paid  the  amount  is  charged  to  one  of  these  sub- 
accounts. When  material  is  purchased  in  large  quanti- 
ties it  is  not  charged  directly  to  the  account  for  which  it 
was  purchased,  and  included  in  the  expenses  of  the  month 
in  which  it  was  purchased,  but  is  charged  to  an  open  or 
running  account  until  a  draft  is  made,  when  the  amount 
is  charged  to  expenses  of  the  month  in  which  it  was  con- 
sumed. This  principle  applied  to  material  purchased  is 
not  the  only  one,  but  any  open  account  is  used  for  the 
same  purpose. 


lOO 

The  chargings  to  the  accounts  already  referred  to  can 
be  applied  to  operating  the  freight  business,  passenger 
business  and  general  business;  the  latter  cannot  be  applied 
directly  to  either  freight  or  passenger,  but  must  be  appor- 
tioned between  freight  and  passenger.  The  expenses 
coming  under  general  division  are  salaries  of  superin- 
tendents, taxes,  etc.,  and  other  expenses  which  cannot  be 
applied  directly  to  either  one.  This  is  done  on  a  mileage 
basis.  The  total  miles  run  by  passenger  trains,  and  the 
total  miles  run  by  freight  trains,  and  whatever  the  per- 
centage relationship  is  of  the  total  miles  run  that  will  be 
the  percentage  basis  for  figuration. 


101 


Income 


ANALYSIS  OF  ACCOUNTS. 
History,    Capital    Stock    and    Funded    Debt. 

Supt.  and  Engineers  Expenses 

Right  of  Way 

Road-bed  and  Track 

Rolling  Stock 

Repair  Shops 

Telegraph  Lines 

Offices 

Additions  and  Betterments 

Passenger  and  Freight 
Express  and  Mail 
Car  Service 


Cost  of  Road  and  Equipment 


Earnings 


1 


Other  Sources 


{ 


Operating  Expenses 


.1 


Fixed  Charges 


Balance  Sheet  Assets 


Balance  Sheet  Liabilities 


Interest  and  Rents 
Surplus  of  previous  year 

General  Expenses 
TrafBc  Department  Expenses 
Maintenance  of  Way 
Maintenance  of  Engines  and  Cars 
Conducting  Transportation 

Interest 

Rentals 

Taxes 

Franchise  Charges 

Cost  of  Road 

Cost  of  Equipment 

Real  Estate  and  Buildings 

Stocks  and  Bonds 

Franchise 

Other  Permanent  Investments 

Cash  on  1 1  and 

Bills  Receivable 

Open  Accounts 

Material  and  Supplies 

Sinking  Fund 

Sundries 

Profit  and  Loss  (Surplus) 

Capital  Stock  (Prefened  and  Common) 

Funded  Debt 

Interest  Due  and  Accrued 

Dividends  Unpaid 

Audited  Vouchers  (Ready  for  Payment) 

Pay-Uolls  (Unpaid) 

Open  Accounts 

Bills  Payable 

Sundries 

Profit  ar.d  Loss  (Deficit) 

Deficit  of  Previous  Year 


RAILWAY  ASSOCIATIONS. 


By  Mr.  Aldace  F.  Walker. 


An  important  difference  between  the  railway  service 
of  the  United  States  and  that  of  other  countries  is  found 
in  the  fact  that  traffic  by  rail  is  here  conducted  by  a 
great  number  of  distinct  corporations.  These  inde- 
pendent organizations  are  found  in  all  the  states  and 
territories  of  the  Union,  maintaining  lines  of  roads  inter- 
laced and  interwoven  through  almost  innumerable  junc- 
tion and  crossing  points,  and  actively  competing  with 
each  other  for  the  freight  and  passenger  business  of 
every  section  of  the  country.  There  are  now  in  the 
United  States  over  150,000  miles  of  railroad  owned  by 
nearly  fifteen  hundred  companies ;  this  aggregate  mile- 
age is  now  operated  by  about  six  hundred  and  twenty- 
five  separate  corporations.  The  process  of  combination 
and  amalgamation  is  a  marked  feature  of  the  railway 
situation,  but  as  yet  it  has  proceeded  only  to  the  extent 
above  indicated.  At  the  present  time  there  is  practically 
no  part  of  the  country  in  which  active  competition  does 
not  exist  between  organically  independent  carriers. 
Even  of  so-called  local  points,  situated  upon  the  line  of 
a  single  road,  there  are  very  few  where  traffic  is  not  in 
some  respects  subject  to  competitive  conditions,  or  where 
the  transportation  charges  can  be  arbitrarily  established 
by  the  carrier.  Nor  is  railway  competition  confined  to 
the  various  routes  which  may  exist  to  and  from  the 
nearest  market;  but  all  markets  are  thrown  open 
throughout  the  land ;  rates  in  a  given  direction  arc  often 
jegulated  by  those  which  exist  in  a  precisely  opposite 

103 


I04 

direction ;  the  price  of  each  commodity  added  to  the  trans- 
portation charge  determines  the  direction  of  the  shipment 
or  the  source  of  supply.  Moreover,  the  various  water 
routes  with  which  our  country  is  favored  have  an  almost 
incalculable  influence  upon  the  railway  rates,  the  expense 
being  very  small  when  compared  with  the  expense  of 
constructing,  maintaining  and  operating  railway  routes. 

The  contrast  thus  presented  with  the  railway  system 
of  France,  for  example,  where  six  great  railway  com- 
panies have  a  vast  sub-division  of  the  national  domain 
assigned  to  each  exclusively,  is  too  marked  to  require 
comment.  And  in  other  European  countries  the  com- 
petitive conditions  which  are  found  in  the  United  States 
have  been  to  a  great  extent  eliminated  through  state 
ownership,  by  protective  legislation,  or  by  amalgamation 
of  titles. 

In  our  peculiar  form  of  dual  government,  each  state 
authorizes  the  construction  of  railroads  within  its 
boundaiy  without  control  or  supervision  by  the  nation. 
Practically,  no  restrictions  have  been  placed  upon  local 
railway  building ;  and  consolidations  of  ownership  or  of 
operative  control  are  easily  accomplished  by  the  consent 
of  state  legislatures,  coupled  with  concurrent  action 
between  adjoining  states. 

Answering  the  demands  of  the  public  for  the  freest 
possible  interchange  of  products  and  commodities,  an 
almost  universal  system  of  through  traffic  has  come  into 
existence;  affording  facilities  which,  while  altogether 
unprecedented,  no  longer  excite  surprise.  Each  com- 
pany might  have  contented  itself  with  receiving 
passengers  or  freight,  and  delivering  them  at  the  end 
of  its  hne  to  its  connections ;  but  this  is  by  no  means 
the  case.     On  the  contrary,  the  various  companies  have 


105 

tiecome  accustomed  to  act  together  in  establishing 
through  rates  of  fare  and  through  freiglit  tariffs  between 
most  distant  points,  without  regard  to  the  hostile  rela- 
tions which  necessarily  exist  among  them  in  respect  to 
competitive  traffic.  Tickets  can  be  universally  purchased 
for  remote  destinations  ;  freight  is  everywhere  consigned 
to  every  other  point.  Customs  have  arisen  in  the  pro- 
visions for  through  business  and  in  the  adjustment  of 
traffic  balances  which  have  the  force  of  law.  The  shipper 
does  not  pause  to  inquire  concerning  the  route  over 
which  his  goods  are  to  be  forwarded;  he  is  informed 
of  the  established  through  rate,  and  he  relics  without 
anxiety  upon  the  arrangements  which  the  companies 
have  established  among  themselves,  concerning  which 
he  has  little  knowledge  and  less  care. 

The  work  of  railway  auditors  and  accountants  has 
become  enormous,  involving  the  exact  apportionment 
not  only  of  each  company's  share  in  all  receipts  from 
through  traffic,  but  also  of  losses  and  of  liabilities  for 
damages,  as  well  as  the  distribution  of  car  service 
charges  and  through  line  expenses.  One  of  the  great 
wants  of  the  present  time  is  a  railway  clearing  house,  or 
a  series  of  clearing  houses  embracing  territorial  groups 
of  roads,  for  the  purpose  of  auditing  their  innumerable 
transactions  upon  a  common  basis,  checking  all  charges 
with  the  estabhshed  tariffs,  and  adjusting  settlements 
between  the  various  lines  each  with  each  other.  It  may 
be  said  in  passing  that  such  a  railway  clearing  house 
was  early  organized  in  England,  and  was  placed  upon  a 
legal  foundation  by  act  of  parliament  in  the  year  1850. 
Nearly  every  company  in  the  United  Kingdom  now 
participates  in  its  benefits.  Its  affairs  are  controlled  by 
a  committee,  on  which  each  line  is  represented ;  and  its 


io6 

awards  are  made  by  law  final  and  conclusive  before  the 
courts. 

When  the  act  to  regulate  commerce  became  effective 
on  April  i,  1887,  our  railway  system  presented  substan- 
tially the  features  outlined  above,  although  many  prac- 
tical advances  in  conducting  the  details  of  universal 
intercommunication  have  since  been  adopted.  It  soon 
became  manifest  that  every  carrier,  to  some  extent  at 
least,  was  engaged  in  interstate  commerce;  and  one 
consequence  of  this  attempt  at  the  national  regulation 
of  railways  has  been  the  perception  by  close  observers 
that  such  regulation,  to  be  successful,  must  be  exclusive; 
in  other  words,  that  Federal  control  and  state  control 
conflict  at  innumerable  points,  so  that  their  co-existence 
before  many  years  will  be  found  practically  impossible. 

The  theory  under  which  the  Interstate  Commerce  law 
was  framed,  contemplated  the  maintenance  of  the  inde- 
pendent existence  of  railway  corporations  as  then  con- 
stituted, subject  to  such  organic  changes  as  their  owners 
might  from  time  to  time  accomplish  by  contract  among 
themselves  in  subordination  to  the  laws  of  the  several 
states  under  which  they  held  their  various  charters,  and 
all  working  together  under  a  uniform  national  control. 
Although  this  was  the  first  important  occasion  in  which 
the  Congress  had  undertaken  to  exercise  the  power 
intrusted  to  it  by  the  constitution,  to  regulate  commerce 
among  the  several  states,  nevertheless  the  act  was  in 
most  respects  well  considered  and  did  not  contemplate 
the  creation  of  any  obstacles  or  embarrassments  in  the 
way  of  the  free  interchange  of  traffic.  On  the  contrary, 
the  maintenance  of  through  routes  and  of  through 
tariffs  was  provided  for,  and  it  was  expressly  made 
unlawful   for  any  common  carrier  in   any   manner  to 


I07 


prevent  the  continuous  carriage  of  freights  from  the 
place  of  shipment  to  the  place  of  destination.  It  became 
immediately  obvious  that  many  duties  were  incumbent 
upon  carriers,  some  imposed  and  others  recognized  by 
the  new  law,  which  could  be  satisfactorily  performed 
only  through  joint  action  among  the  roads. 

There  were  in  existence  at  that  time  many  tariff 
organizations,  commonly  known  as  pools,  which,  in 
addition  to  the  apportionment  between  competing  lines 
of  earnings  derived  from  competitive  traffic,  performed 
many  other  important  functions  in  making  necessary 
arrangements  of  all  kinds  under  which  traffic  might  be 
systematically  conducted.  These  organizations  had 
been  found  indispensible  for  the  proper  and  efficient 
transaction  of  railroad  business ;  and  when  the  pooling 
of  freights  was  abandoned  these  existing  organizations 
each  became  the  nucleus  of  a  reorganized  association, 
exercising  a  certain  supervision  and  control  over  tariffs 
and  traffic  arrangements.  The  form  of  their  orf^aniza- 
tion,  and  their  purposes  are  not  clearly  understood  by 
the  public ;  in  fact,  their  very  existence  has  given  rise 
in  some  sections  to  jealousy ;  they  haft^e  been  attacked 
from  time  to  time  before  the  Interstate  Commerce 
Commission ;  state  legislatures  have  attempted  their 
suppression;  and  in  Texas  a  judicial  decision  of  the 
highest  tribunal  has  held  one  of  them  to  be  organized 
in  a  form  incompatible  with  the  provisions  of  the  consti- 
tution of  the  state. 

At  the  present  time  the  leading  railway  associa- 
tions are  the  following:  The  Trunk  Line  Association, 
embracing  the  great  railroads  which  operate  between 
the  Atlantic  seaboard  and  the  cities  of  Buffalo,  Pittsburg 
and  Wheeling ;   the  Central  Traffic  Association,  which 


io8 

includes  most  of  the  roads  in  the  territory  west  of  the 
Trunk  Lines  as  far  as  Chicago  and  St.  Louis;  the 
Interstate  Commerce  Railway  Association,  with  its 
affiliated  organizations  called  the  Western  Freight  Asso- 
ciation, the  Western  States  Passenger  Association  and 
the  Trans-Missouri  Freight  and  Passenger  Association, 
covering  the  region  between  Chicago  and  St.  Louis  on 
the  one  hand  and  the  Rocky  Mountains  on  the  other ; 
the  Southern  Railway  and  Steamship  Association  and 
the  Southern  Passenger  Association,  having  their  field 
in  the  southern  states  east  of  the  Mississippi  river;  the 
Southern  Interstate  Association,  working  in  the  south- 
west beyond  the  Mississippi ;  and  the  Trans-Continental 
Association,  embracing  traffic  to  and  from  the  Pacific 
coast.  In  addition  to  the  foregoing  there  are  a  number 
of  other  associations,  some  of  which  have  to  do  with  the 
freight  or  passenger  traffic  of  smaller  sections  of  the 
country ;  some  with  selected  articles  of  traffic  ;  some  are 
hmited  to  particular  subjects  like  classification  and  the 
exchange  of  cars. 

Their  organization  is  very  simple.  The  officer  in 
charge  is  usually  designated  as  commissioner,  or  chair- 
man; and  he  is  generally  assisted  by  a  secretary,  an 
accountant  or  auditor,  and  a  small  staff  of  clerks  who 
perform  such  services  as  are  necessary  in  the  prepara- 
tion and  publication  of  tariffs  and  the  collection  and  dis- 
tribution of  statistics.  They  are  purely  voluntary,  and 
are  formed  by  agreement  between  the  various  lines 
which  compose  them,  the  details  of  which  are  expressed 
in  articles  of  association  subscribed  by  representatives 
of  the  several  roads.  These  agreements  are  filed  with 
the  Interstate  Commerce  Commission,  pursuant  to  the 
requirement  of  the  act  to   regulate   commerce,  which 


109 

provides  for  the  filing  of  copies  of  all  contracts,  agree- 
ments or  arrangements  between  common  carriers  in 
relation  to  traffic  affected  by  the  provisions  of  said  act. 
Stated  meetings  arc  held  from  time  to  time,  usually 
monthly,  wliich  are  attended  by  a  representative  of  each 
line,  and  which  are  usually  presided  over  by  the  chair- 
man or  commissioner.  Unanimous  agreement  is  com- 
monly required  in  order  to  effect  a  change  in  established 
rates,  rules  or  regulations  respecting  traffic,  subject, 
however,  to  a  right  or  independent  action  which  is 
reserved  in  case  of  failure  to  agree.  In  the  event  of 
disac^reement  between  the  lines  arbitration  is  sometimes 
provided  for.  The  duties  of  the  chairman  frequently 
embrace  the  investigation  of  cases  where  it  is  claimed 
that  tariffs  have  not  been  maintained,  or  that  the 
established  rules  and  regulations  which  govern  the 
handling  of  traffic  have  been  departed  from ;  the 
requirements  of  the  association  in  such  cases  being  in 
conformity  with  the  provisions  of  the  act  to  regulate 
commerce,  which  forbids  the  charging  of  a  greater  or 
less  compensation  for  the  transportation  of  passengers 
or  property  than  is  specified  in  the  schedule  of  rates, 
fares  and  charges  at  the  time  in  force,  and  which 
requires  ten  days'  public  notice  of  any  advance  in  rates, 
together  with  three  days'  public  notice  of  reduction. 

The  basis  upon  which  these  associations  rest  is  simply 
good  faith  among  the  members.  They  are  not  corpora- 
tions, and  they  exercise  no  corporate  powers ;  yet  they 
deal  at  times  with  questions  of  the  utmost  importance, 
and  their  influence  is  distinctly  visible  in  every  branch  of 
the  railway  service.  The  subjects  which  they  treat  are 
not  restricted  to  the  territory  which  they  respectively 
embrace,  but  the  various  associations  are  able,  by  nego- 


no 

tiation  with  each  other,  to  accomplish  results  in  the  man- 
agement of  long  distance  traffic  that  would  otherwise  be 
altogether  impossible. 

In  order  to  correctly  apprehend  the  relation  which  they 
bear  to  the  governmental  regulation  of  carriers,  it  is  neces- 
sary first  to  understand  precisely  what  is  undertaken  by 
the  federal  law  under  which  all  interstate  commerce  is 
now  carried  on.  When  this  is  properly  appreciated  it  will 
be  perceived  that  the  work  of  the  associations  is  directly 
in  line  with  the  administration  of  the  law;  in  fact,  that  they 
owe  their  existence  at  the  present  time  to  the  effort  and 
desire  of  the  carriers  to  transact  their  business  in  con- 
formity with  the  statute  ;  and  that  as  a  practical  matter 
the  act  to  regulate  commerce  would  not  be  workable 
without  the  intervention  of  railway  associations. 

The  object  proposed  by  Congress,  in  enacting  the 
Interstate  Commerce  law,  may  be  perceived  by  ascertain- 
ing the  then  existing  evils  which  that  legislation  proposed 
to  remedy.  The  introduction  of  the  bill  was  preceded 
by  a  long  investigation,  which  resulted  in  the  formulation 
of  an  able  report  discussing  broadly  the  general  subject 
of  the  internal  commerce  of  the  country,  its  importance 
and  the  methods  employed  in  carrj'ing  it  on  ;  and  which 
embraced  a  concise  and  summary  statement  of  conclu- 
sions entitled  "  The  Causes  of  Complaint  Against  the 
Railroad  System."  The  points  covered  by  this  indict- 
ment were  eighteen  in  number,  and  there  is  scarcely  one 
of  them  which  is  not  comprehended  within  the  significant 
word  "  discrimination."  It  was  charged  that  local  rates 
were  unreasonably  high  as  compared  with  through  rates; 
that  both  were  unreasonably  high  at  non-competing 
points;  that  unjustifiable  discriminations  were  constantly 
made  between  individuals ;  also  between  articles  of  freight 


II I 

and  branches  of  business  of  a  like  character ;  also  between 
localities  ;  also  by  the  use  of  secret  special  rates,  rebates, 
drawbacks  and  concessions  ;  also  by  secret  cutting  rates 
and  fluctuations,  demoralizing  to  legitimate  business;  also 
by  the  granting  of  free  passes ;  by  undue  advantages 
afforded  to  business  enterprises  in  which  railway  officials 
were  interested ;  and  otherwise  as  was  set  forth  with 
particularity  and  detail. 

Examined  in  the  light  of  this  report  it  is  easy  to  per- 
ceive that  the  fundamental  purpose  of  the  Interstate 
Commerce  law  is  the  prevention  of  discrimination  in 
every  form.  The  first  five  sections  of  the  statute  declare 
the  principles  that  are  to  regulate  the  internal  commerce 
of  the  country,  and  the  subsequent  sections  provide 
machinery  for  the  enforcement  of  the  rules  thus  first  laid 
down.  These  rules  are  three  in  number :  First,  all  rail- 
road charges  shall  be  reasonable  and  just;  second,  no 
unjust  discrimination  between  persons  by  means  of  special 
rates,  rebates,  drawbacks,  or  other  devices  shall  be  per- 
mitted ;  third,  no  undue  or  unreasonable  preference  or 
advantage  shall  be  given  to  any  person,  locality  or 
description  of  traffic,  in  the  establishment  of  tariffs. 

These  provisions  comprise  the  foundation  principles  of 
the  Interstate  Commerce  law ;  the  famous  fourth  section 
being  merely  a  declaration  that  the  charge  of  a  greater 
sum  for  a  shorter  than  for  a  longer  distance,  shall  consti- 
tute a  preference  or  discrimination  in  favor  of  the* more 
distant  point,  unless  conditions  and  circumstances  exist 
which  make  the  service  dissimilar ;  and  the  fifth,  or  anti- 
pooling  section,  was  undoubtedly  the  result  of  a  belief  on 
the  part  of  its  authors  that  the  pooling  system,  by  stifling 
competition,  tended  to  make  rates  unreasonably  high. 

The  leading  feature  of  the  administrative  portion   of 


112 

the  law  is  found  in  the  sixth  section,  which  requires  the 
establishment  and  publication  by  the  carriers  of  tariffs 
showing  rates,  fares  and  charges  for  all  interstate  carriage 
of  passengers  and  property,  together  with  the  classifica- 
tion of  freight  in  force,  and  any  rules  or  regulations 
which  affect  the  rates.  These  tariffs  are  required  to  be 
filed  with  the  Commission,  and  when  established  must  be 
absolutely  adhered  to.  The  charge  of  a  greater  or  less 
sum  than  the  established  rate  is  made  a  midemeanor. 
This  requirement  that  tariffs  for  all  traffic  shall  be  fixed 
in  advance,  madepublicandrigidly  observed,  is  obviously 
designed  to  prevent  discrimination.  The  task  imposed 
upon  the  carriers  by  the  passage  of  the  law  was  an  enor- 
mous one.  It  involved  nothing  less  than  the  establish- 
ment of  a  full  and  complete  system  of  schedules  of  rates, 
fares  and  charges,  not  only  between  the  stations  upon 
each  road,  but  between  all  points  in  the  United  States 
under  which  through  traffic  might  be  handled  by  joint 
tariffs,  which  should  be  without  preference,  as  between 
localities,  and  as  between  classes  of  traffic ;  which  should 
be  just  and  reasonable  in  every  respect,  and  which  should 
be  made  the  measure  by  which  all  transportation  charges 
should  be  governed,  disregarding  previous  customs  and 
usages,  and  suddenly  bringing  the  entire  interstate  traffic 
of  the  country  within  the  operation  of  a  procrustean  rule. 
Sixty  days  were  allowed  for  this  task  before  the  law 
became  operative.  The  work  is  by  no  means  finished 
yet.  The  various  details  necessary  to  be  covered  in  the 
establishment  of  tariffs,  classifications,  rates,  rules  and 
regulations  controlling  transportation  of  persons  and 
property  are  almost  innumerable.  Tariffs  and  traffic 
regulations  must  necessarily  be  alike  upon  the  lines  of 
carriers  engaged  in  joint  operations,  or  holding  competi- 


113 

tive  relations  with  each  other.  Harmonious  action  be- 
tween carriers  was  an  absolute  necessity  in  order  to  enable 
them  to  take  the  first  step  in  obedience  to  the  adminis- 
trative sections  of  the  Interstate  Commerce  law.  This 
cause  compelled  the  continuance,  for  the  purpose  above 
described,  of  such  associations  as  had  previously  been  in 
existence,  and  the  development  of  a  system  for  the  con- 
duct of  traffic,  in  which  the  existing  associations  play  an 
important  part.  The  Interstate  Commerce  Commission, 
in  its  first  annual  report,  recognized  this  feature  of  the 
situation  in  carefully  chosen  words,  as  follows  : 

Voluntary  Association  of  Railroad  Managers. 

"  Nearly  every  railroad  in  its  origin  has  been  independ- 
ent of  all  others,  and  in  the  early  history  of  such  roads 
they  were  commonly  provided  for  as  local  conveniences, 
with  no  provision  of  the  great  highways  of  trade  and 
communication  which  they  have  since  become.  It  was 
in  many  cases  thought  to  be  important  that  a  road  should 
be  kept  as  distinct  in  its  business  from  all  others  as  pos- 
sible, and  at  their  termini  in  some  instances  they  are  not 
allowed  to  have  the  same  freight  or  passenger  stations 
with  other  roads,  lest  the  local  draymen  and  hackmen 
should  be  deprived  of  a  profitable  employment. 

When  the  'great  possibilities  of  railroad  service  came 
to  be  better  understood  these  primitive  notions  of  local 
benefits  gave  way  before  a  more  enlightened  public  senti- 
ment, and  the  fact  was  recognized  that  the  public  interest 
would  be  best  subserved  by  making  the  connection 
between  the  roads  as  close  as  possible,  in  order  that  the 
commeroe  between  different  sections  and  localities  might 
go  on  steadily  and  uninterruptedly.     The  railroad  com- 


114 

panics  perceived  also  that  their  interest  lay  in  the  same 
direction.     *     *     * 

To  make  railroads  of  the  greatest  possible  service  to 
the  country,  contract  relations  would  be  essential,  because 
there  would  need  to  be  joint  tariffs,  joint  running  arrange- 
ments, an  interchange  of  cars  and  a  giving  of  credit  to  a 
large  extent,  some  of  which  were  obviously  beyond  the 
reach  of  compulsory  legislation,  and  even  if  they  were 
not,  could  be  best  settled  and  all  the  incidents  and  quali- 
fications fixed  by  the  voluntary  action  of  the  parties  in 
control  of  the  roads  respectively. 

Agreement  upon  these  and  kindred  matters  became, 
therefore,  a  settled  policy ;  short,  independent  lines  of 
road  seemed  to  lose  there  identity  and  to  become  parts  of 
great  trunk  lines,  and  associations  were  formed  which 
embraced  all  the  managers  of  roads  in  a  state  or  section 
of  the  country.  To  these  associations  were  remitted 
many  questions  of  common  interest,  including  such  as  are 
above  referred  to.  Classification  was  also  confided  to 
such  associations,  it  being  evident  that  differences  in 
classification  were  serious  obstacles  to  a  harmonious  and 
satisfactory  interchange  of  traffic.  But  what  perhaps 
more  than  anything  else  influenced  the  formation  of  such 
associations  and  the  conferring  upon  them  of  large  autho- 
rity, was  the  liability,  which  was  constantly  imminent, 
that  destructive  wars  of  rates  would  spring  up  between 
competing  roads  to  the  serious  injury  of  the  parties  and 
the  general  disturbance  of  business. 

Accordingly,  one  of  the  chief  functions  of  such  asso- 
ciations has  been  the  fixing  of  rates  and  the  devising  of 
means  whereby  their  several  members  can  be  compelled 
or  induced  to  observe  the  rates  when  fixed.  And  in 
devising  these  means  the  chief  difficulty  was  encountered. 


115 

Agreements  upon  rates  were  voluntary  arrangements 
which  could  be  departed  from  at  pleasure,  and  if  they  had 
behind  them  no  sanction,  they  were  not  likely  to  stand  in 
the  way  of  a  war  of  rates  when  the  provocation  to  one 
seemed  sufficient.  Accordingly,  the  scheme  of  pooling 
freights  or  the  earnings  from  traffic  was  devised  and  put 
in  force  through  the  agency  of  these  associations,  as  a 
means  whereby  steadiness  in  rates  might  be  maintained. 
The  scheme  was  one  which  was  made  use  of  in  other 
countries  and  had  been  found  of  service  to  the  roads. 

The  pooling  system  was  looked  upon  with  distrust  by 
the  public,  mainly  because  it  seemed  to  be  a  scheme 
whereby  competition  between  the  roads  could  be  obviated 
and  rates  for  railroad  service  put  up  or  kept  up  to  unrea- 
sonable figures.  But  if  railroad  managers  supposed  that 
by  this  scheme  they  were  to  stop  competition  among 
themselves,  the  result  has  not  answered  their  expectations. 

Competition  has  still  gone  on;  each  road  striving  to 
obtain  as  large  a  share  of  the  business  as  possible,  and 
no  agreement  among  them  could  altogether  prevent  a 
yielding  to  the  pressure  of  shippers  for  lower  rates.  *  *  * 

The  pooling  of  freights  and  of  railroad  earnings  so  far 
as  the  commission  has  knowledge  or  information  on  the 
subject,  came  to  an  end  when  the  act  took  effect.  But 
as  pooling  was  only  one  of  several  purposes  had  in  view 
in  forming  railroad  associations,  the  leading  associations 
have  not  been  dissolved,  but  have  been  continued  in  exis- 
tence for  other  objects.  Among  these  objects  are  the 
making  of  regulations  for  uninterrupted  and  harmonious 
railroad  communication  and  exchange  of  traffic  within 
the  territory  embraced  by  their  workings.  Some  regula- 
tions in  addition  to  those  made  by  the  law,  are  almost,  if 
not  altogether,  indispensable.     Thus,  while  the  seventh 


ii6 

section  of  the  act  forbids  the  carriers  preventing  ship- 
ments from  being  continuous  by  the  device  of  changing 
time  schedules,  carriage  in  different  cars,  etc.,  it  has  not 
undertaken  to  provide  for  the  making  of  such  time 
schedules  as  would  facilitate  the  continuous  shipment, 
or  to  prescribe  rules  for  the  loading  and  movement  of 
cars  for  that  purpose.  However  desirable  this  might 
have  been,  if  it  were  practicable  to  make  rules  which, 
while  general  in  their  nature,  should  be  sufficiently 
definite  of  enforcement  as  laws,  it  was  doubtless  per- 
ceived by  Congress  that  these  and  many  other  matters 
of  detail,  though  they  might  be  of  high  importance, 
could  not  be  wisely  and  effectively  dealt  with  by  general 
legislation,  but  that  such  legislation  must  chiefly  be 
restricted  to  provisions  for  regulation  and  to  prevent 
abuse. 

"  Moreover,  these  matters  of  detail,  to  a  considerable 
extent,  involve  the  element  of  contract,  and  also  of 
credit,  when  one  company  becomes  the  agent  for 
another  in  the  sale  of  tickets  and  the  collection  of 
freight  moneys;  and  they  then  require  the  assenting 
minds  of  parties,  and  the  number  of  parties  whose  minds 
are  to  be  brought  into  accord  being  commonly  very 
considerable,  an  association  of  officers  or  agents  is  made 
the  means  of  bringing  about  the  desired  unity  of  action, 
and  is  also  made  a  common  arbiter,  to  prevent  frequent 
and  serious  disturbances. 

"Classification  also,  as  has  been  said,  is  not  by  the  act 
taken  out  of  the  hands  of  the  carriers,  though  a  certain 
power  of  supervision  is  vested  in  the  commission ;  and 
classification  is  not  only  best  made  by  joint  action,  but 
if  it  were  not  so  made  and  the  methods  of  the  roads 
thereby    brought    into    harmony,    it    would    probably 


117 

become  indispensable,  however  undesirable  it  might 
otherwise  be,  for  the  law  to  undertake  to  provide  for  it. 
Moreover,  when  classification  is  made  and  put  into  effect 
it  becomes  necessary  to  make  provisions  tor  inspecting  or 
some  sort  of  supervision  of  its  application,  in  order  to 
firevent  its  being  employed  as  a  device  for  giving  prefer- 
ences as  between  shippers.  A  fraudulent  classification, 
through  connivance  of  the  agent  in  making  out  decep- 
tive shipping  bills,  has  often  been  resorted  to  for  this 
purpose ;  and  as  the  fraud  affects  the  competing  carriers 
as  well  as  the  shippers  who  are  discriminated  against  by 
means  of  the  cheat,  the  carriers  and  the  public  alike  are 
interested  in  such  a  supervision  of  the  work  of  all  the 
roads  as  will  be  likely  to  detect  the  fraud.  Self  interest 
on  the  part  of  the  carriers  will  impel  to  this  supervision, 
and  it  is  most  generally  done  through  some  common 
agency.  If  it  shall  be  fairly  done  as  between  the  carriers 
themselves,  it  will  tend  to  the  protection  of  the  public; 
and  the  benefits  will  be  on  the  same  line  with  those  the 
act  undertakes  to  establish  or  provide  for." 

Joint  Traffic. 

It  will  be  observed  that  the  traffic  which  lies  within 
the  scope  of  association  control  may  be  considered  under 
tw^o  distinct  relations,  as  joint  traffic  and  as  competitive 
traffic.  Joint  traffic  is  defined  in  the  act  to  regulate 
commerce  as  "  where  passengers  and  freight  pass  over 
continuous  lines  or  routes  operated  by  more  than  one 
common  carrier,  and  the  several  common  carriers  opera- 
ting such  lines  or  routes  establish  joint  tariffs  of  rates  or 
fares  or  charges  for  such  continuous  lines  or  routes." 
The  general  nature  of  the  work  of  the  associations  in 


ii8 

respect  to  joint  traffic  has  been  already  indicated. 
Through  their  agency  arrangements  of  all  kinds  are 
consummated  under  which  joint  service  is  made 
possible,  and  constant  improvements  in  its  extent  and 
facilities  are  brought  about.  The  principal  subjects  of 
negotiation  and  concerted  action  are  the  following: 
rates,  classification  of  freight,  apportionment  of  earnings 
and  inspection.  Other  points  relating  to  through  traffic, 
such  as  time  table  arrangements,  exchange  of  cars  and 
settlement  of  traffic  balances  are  usually  adjusted  by 
individual  connecting  lines. 

Lines  where  traffic  originates  are  expected  to  establish 
and  publish  through  rates  to  points  of  ultimate  destina- 
tion, but  such  rates  must  necessarily  be  made  by  agree- 
ment between  the  various  lines  composing  such  through 
routes,  and  the  necessary  agreements  would  be  too  infinite 
in  number  to  be  practically  possible  without  the  assistance 
of  associations.  The  present  extremely  complicated 
system  is  the  result  of  long  years  of  negotiation  and 
contest.  The  effect  of  rates  which  exist  in  one  section 
of  the  country  upon  those  made  between  very  distant 
points,  can  be  appreciated  only  by  careful  study. 
Certain  principles  in  the  relation  of  rates  to  each  other 
and  in  the  use  of  established  differences,  sometimes 
called  differentials,  have  been  worked  out,  usually  by 
some  arbitration  or  agreement,  founded  upon  just 
reasons  and  presenting  a  m.edium  betv/een  the  claims 
of  competing  points.  These  adjustments  are  found  in 
every  section  of  the  country  and  are  made  upon  the 
broadest  principles.  While  one  community  and  another, 
upon  a  narrow  view  of  its  geographical  situation,  has 
from  time  to  time  made  complaint  of  an  alleged  unfair 
adjustment  of  its  rates,  instances  have  been  very  few  in 


119 

which  the  Hnes  have  been  unable  to  demonstrate  that 
the  tariffs,  in  fact,  were  just  and  reasonable,  upon  the 
requirements  of  the  whole  situation  involved.  Through 
rates  are  almost  invariably  somewhat  less  than  the  sum 
of  the  local  rates,  and  are  necessarily  established  by 
concerted  action  in  view  of  the  relation  of  rates  at  one 
point  to  those  at  others.  The  mileage  rate  of  the 
shortest  line  is  taken  as  the  maximum.  No  line,  how- 
ever circuitous,  can  expect  to  participate  in  the  traffic 
if  its  rates  are  higher ;  and  cases  are  found  where  the 
effort  is  made  to  attract  travel  to  longer  routes  by  the 
employment  of  a  lower  rate  than  is  charged  by  direct 
routes  between  the  same  points. 

Much  has  been  said  in  relation  to  the  importance  of  a 
uniform  classification  of  freight  throughout  the  land.  A 
common  classification  even  in  a  single  state  requires  con- 
certed action.  Every  article  of  merchandise  must  be 
taken  up  and  considered  with  relation  to  the  various 
considerations  embraced  in  the  establishment  of  its  just 
and  reasonable  classification ;  in  addition  to  this  the 
development  of  the  traffic  of  every  line  must  be  kept  in 
mind,  and  the  classification  of  each  commoditv  must  be 
sufficiently  low  to  permit  of  its  free  movement.  Prior 
to  the  passage  of  the  act  to  regulate  commerce  thirty- 
seven  different  classifications  were  in  use  in  the  territory 
of  the  Central  Traffic  Association.  The  great  bulk  of 
interstate  traffic  throughout  the  United  States  is  now 
handled  under  four  classifications.  The  progress  which 
has  been  made  in  this  direction  would  have  been 
impossible  but  for  the  fact  of  the  existence  of  railway 
associations,  in  which  the  subject  has  been  efficiently 
handled.  At  the  present  time  a  conference  of  represen- 
tatives of  all  the  associations  is  in  existence,  meeting 


120 

from  time  to  time  and  engaged  in  the  work  of  still 
further  simpHfying  and  harmonizing  the  present  differ- 
ences, with  a  view,  if  possible,  to  ultimately  establish  a 
single  uniform  classification  of  freight. 

The   subject  of  the  apportionment  of  receipts  from 
joint  traffic  between  the  various  lines  which   unite  to 
form  through  routes  is  one  of  the  utmost  importance  to 
the  carriers,  but  in  which  the  general  public  has  little 
interest.     Shippers  are  concerned  solely  with  the  ques- 
tion of  the  rate  which  they  are  required  to  pay  as  an 
aggregate  through  rate  from  the  initial  point  to  the  point 
of  destination.    The  division  thereof  between  the  various 
roads  which  unite  in  performing  the  service  is  of  no 
consequence   to    the    public,   although    of    great  con- 
sequence  to  the  carriers.     These   divisions   have   been 
and  are  a  constant  subject  of  negotiation  and  modifica- 
tion.    In  determining  the  share  of  a  through  rate  which 
any  given  link  will  receive,  a  great  variety  of  elements 
are  taken  into  account.     A  common   basis  where  the 
lines  participating  in  the  division  are  relatively  equal  is 
that  of  mileage,  under  which  the  through  rate  is  prorated 
according  to  the  length  of  the  various  roads.     This  basis, 
however,  is  by  no  means  universal.     Weak  lines,  or  roads 
where  the  traffic  is  light  and  expenses  are  high  are  accus- 
tomed to  claim  and  are  usually  conceded  an  additional 
allowance  in  the  division  of  the  earnings  upon  through 
traffic.    Sometimes  this  concession  takes  the  form  of  an 
arbitrary  allowance  for  an  expensive  bridge,  or  for  a 
mountainous  haul ;  sometimes  an  arbitrary   mileage   is 
assigned,  one  and  a  half,  twice  or  even  thrice  the  actual 
mileage  of  the  line  in  question;    sometimes  an  arbitrary 
division  of  the   total   through    rate   is  awarded,   under 
which  a  short  branch  line,  or  feeder,  may  receive  one 


121 

third  or  e\xn  one  half  of  the  total  income ;  sometimes 
the  adjustment  is  made  upon  the  relative  local  rates 
charged  in  different  sections  of  the  country,  so  that 
roads  where  traffic  is  thin  and  low  rates  are  impossible, 
divide  with  other  lines  having  a  heavy  tonnage  and  low 
freight  charges  upon  the  basis  of  the  sums  received  by 
each  respectively  for  their  local  traffic.  These  matters 
are  necessarily  the  subject  of  frequent  negotiation,  and 
are  often  adjusted  between  large  sections  of  the  country 
east  and  west,  or  north  and  south,  by  concerted  action 
through  the  associations  which  represent  the  lines  in  the 
various  sections  involved  in  the  question.  It  often  occurs 
that  lines  are  willing,  for  the  sake  of  increasing  their 
own  traffic,  to  concede  to  their  connections  a  larger  share 
in  the  earnings  of  joint  business  than  would  naturally 
accrue  to  them.  Lines  having  more  than  one  outlet  are 
sometimes  able  to  sell  their  traffic  to  the  highest  bidder. 
Some  standard  is  usually  adjusted  for  a  considerable 
extent  of  territory,  designed  to  effect  an  equitable  distri- 
bution of  the  results  of  joint  traffic  between  the  lines  of 
which  various  through  routes  are  composed.  Were  it  not 
for  the  existence  of  associations  where  understandings 
already  reached  are  maintained,  and  necessary  changes 
are  effected  from  time  to  time,  confusion  would  at  once 
arise  and  chaos  would  speedily  follow. 

The  advantages  to  shippers  and  passengers  arising 
from  the  through  billing  of  freight,  and  through  tickets 
under  the  coupon  system,  need  not  be  enlarged  upon. 

The  importance  of  the  inspection  of  freight  is  found  in 
the  fact  that,  without  it,  advantages  would  be  continually 
obtained  by  shippers  as  against  each  other.  It  becomes 
necessary,  therefore,  to  establish  bureaus  not  controlled 
by  individual  roads,  which  would  be  under  the  constant 


122 


^^::-C-:.^:rfi 

tl- 

-    _    _  ^ 

itf 

be  i^  _ 

-'•  ::£, 

-   "    -e,  the  r 

--^^  preferences  in  order  to  dbt^ 

^- Jer  assooations  of  carriers  where 

rules  of  shipment  be  mavnsaUy 

^.      "J^  ijJ^Kxtioo  scmce 

■  -'^"c^Tis  poinlslbr 

r";'       _         applied,  aod  flot  Ae' 

^  is  TCiy  stm^cnt  in 

^  reoTilajions  ^l,^ 

V  "pose  of 


^lons 


'°™'**Jui3i'E  -maiTsc. 


-  -  -     1   c»Mmoe  as  r-kMMwJu  -^  _  *»  ^^ 


ascJianadb  of 


123 


hardly  be  claimed  to  be  for  the  h^  ;nt„  ^    r  ^ 

at  large;  and  the  san,e  thin,  l^"t^^°^"'^P-"*= 

betueen  competing  railroadCL      ^  °^-"P^<« 

^tT'^z^f^::^":  ^^  r  ^-"^  ■-  p- 

hons  several  wealthy  coraoraaon.  u-i^,L  ^^" 

that  they  must  foreC-er  ^p^r^nd  lf„Z'""~"' 
cumstances  shall  concerted  action  iTI-Int^  ""  T 
presently  result  in  the  evtirr^  ?  allowed,  would 
Tk-    1,  \  '"*°"''f<=°eormoreorfh«n 

Th,s  has  been  so  often  practicallv  demon -f^tJ^ 
where  competition  between  riJi  °"^°"f^ted  m  cases 
weaker  to  thTwall  and^^te^  h  LT"^  ^-  ■"'""  *^ 
crother  rormof  combinX^iT.,S^°J'>;;^ 

^r  :rr'^'>-  -•--■  ^*  ^ts^STenr^ 


Again.  ade<;uate  rai-K^v  =—    -.  r-^„,w  ,v 
nance  of  the  road  and  its  «  -tl^^l  "^'^" 

and  efficient  form.  to<.eth^wift  X  ""^  P^'^ 

e™p.o3-es  of  the  i^^smT^T'^'^Zu"' 
ser^-,ce  cannot  be  rendered  unless  the  rat«  =^1,'^ 
to  its  support,  and  adequate  also  to^L^^         ^^^ 
in  the  field  of  the  necLa^  ^p  ^    .^    '  "'""'""^ 
^.to  ha™oni.ethe.V  col-S'^,.,:^--^^ 

l:^:::7r^T'^  a  war  of  tat.  enlut^ 
eierj  rate  «-ar  the  pubbc  as  well  as  the  carr-r^  n,,,-! 

^an!;  L^h^nr-oT.r'^^-^'- 

-y  exist,  and  d^  eS.  wWe^.^r"^;,  ~""^«' 
The  veo-  feet  that  difielt  r^ut^r^roS^ 
sents  the  essential  element  of  competitir  -nJ^,?^ 
and  aA-antages  of  compebn.  rouS  ™  .K        u°^^ 

selection  by  shippers  ^d  ^  ""''J"*  '*'■ 

>   snippers  and  passengers  while  rates  may 


124 

be  alike  on  all.  It  cannot  be  denied  that  the  public 
generally  is  more  interested  in  safe  and  efficient  railway 
ser\'ice  than  in  extremely  low  railway  rates.  Rates  may 
easily  be  so  low  as  to  render  such  serxnce  impossible. 
The  public  is  best  ser\'ed  b)'  rates  which  are  reasonable, 
uniform  and  firmly  maintained.  This  is  precisely  what 
the  act  to  reflate  commerce  demands.  English  tribu- 
nals have  affirmed  healthy  competition  to  be  that  in 
which  x-arious  transportation  routes  are  kept  open  which 
are  "  practically  independent  of  one  another,  fairly  alter- 
native, and  reasonably  calculated  to  keep  one  another  in 
check-" 

Looking  at  the  question  of  competitive  rates  as  affected 
by  the  requirements  of  the  act  to  regulate  commerce,  it 
will  easily  be  seen  that  some  degree  of  concurrent  action 
between  the  competitors  is  indispensable.  Although  in 
denouncing  discrimination  the  act  in  terms  applies  to 
individual  carriers,  a  moment's  reflection  will  show  that 
discrimination  in  rates  between  competing  carriers  is 
equally  prejudicial  to  the  public  interest.  Suppose,  for 
example,  that  there  were  only  two  lines  of  road  between 
New  York  Cit)-  and  Chicago,  and  that  the  charges  upon 
one  were  twenty  per  cent  lower  than  upon  the  other. 
So  far  as  volume  of  traffic  is  concerned,  the  immediate 
result  would  be  to  turn  all  business  to  which  a  choice 
of  the  two  routes  was  open,  upon  the  road  gi\'ing  the 
lowest  rate,  but  so  far  as  the  manufacturing  public  is 
concerned,  everj'  establishment  situated  upon  the  line 
of  the  other  road  would  at  once  be  placed  at  a  disadvan- 
tage impossible  to  overcome.  Nor  is  this  confined  to 
rates  alone.  If,  for  example,  one  trunk  hne  from  the 
eastern  seaboard  to  the  west,  transports  sugar  at  its  net 
weight,  deducting  the  weight  of  the  barrels,  while  the 


regulations  in  force  upon  the  other  Hues  demand  that 
the  gross  weight  shall  be  employed  in  applying  the 
same  tariff  rate,  the  refineries  upon  the  latter  roads  are 
placed  at  a  disadvantage  sufficient  to  exclude  them  from 
the  territory  reached  by  the  other  line;  or  if  one  line 
returns  without  expense  tank  cars  furnished  by  shippers 
of  oil,  while  another  line  exacts  a  charge  for  the  return 
of  such  cars,  the  refineries  located  upon  the  latter  line 
are  discriminated  against  to  an  extent  which  would  soon 
close  their  works.  Hundreds  of  instances  like  the  fore- 
going might  be  readily  enumerated,  in  which  the  failure 
to  apply  similar  rules  and  regulations,  as  well  as  similar 
tariffs,  by  competing  lines  of  road  would  result  almost 
immediately  in  the  destruction  of  important  industries. 
It  is  absolutely  essential  that  discrimination  be  pre- 
vented by  the  formulation  of  rules,  regulations  and 
tariffs  between  competing  lines,  which  shall  work  out 
exact  justice  to  the  patrons  of  all.  This  is  one  of  the 
results  accomplished  through  the  agency  of  railroad 
associations.  It  may  be  said  that  by  preserving  absolute 
independence  of  action  the  desire  to  secure  competitive 
traffic  would  compel  the  line  which  wished  to  maintain 
a  higher  rate  to  reduce  its  charge  to  the  basis  fixed  by 
its  rival;  but  this  would  not  necessarily  follow,  and  if  it 
did  not  follow  the  result  would  be  a  series  of  reductions, 
causing  great  disturbance  to  business,  and  ultimately 
resulting  in  the  elimination  of  one  or  the  other  of  the 
competitive  agencies. 

Again,  enlarging  the  field  of  vision,  and  taking  the 
case  of  carriers  from  different  competing  points  to  the 
same  markets,  or  from  different  markets  to  the  same 
field  of  distribution,  discrimination  necessarily  produces 
a  similar  result  to  that  above  described.     One  point  or 


126 

the  other  is  excluded,  and  the  public  is  wronged.  Ths 
only  remedy  possible  is  the  establishment  of  a  cor- 
responding or  a  relatively  equivalent  rate  to  or  from  the 
different  points  in  question  which  will  prevent  unjust 
discrimination,  preference  or  advantage,  and  serve  the 
whole  public  equably. 

And  once  more,  consider  a  complicated  network  of 
roads  which  operates  through  a  wide  sweep  of  territory 
in  which  the  products  are  all  competitive  and  all 
markets  are  common ;  the  law  leaves  them  to  fix  their 
rates  each  for  itself;  without  co-operation  the  trans- 
portation charges  would  immediately  become  grossly 
discriminative,  and  in  the  end  almost  certainly  would 
become  inadequate  to  sustain  the  service,  while  inflicting 
great  wrong  upon  innumerable  communities. 

Association  among  competitive  carriers  for  the  adjust- 
ment of  their  rates  and  their  traffic  regulations,  is  required 
by  sound  public  policy.  It  makes  possible  the  handling 
of  traffic  which  is  competitive  as  between  individuals  and 
between  localities,  without  preference  and  without  discri- 
mination. It  is  required  upon  similar  considerations  to 
those  under  v.hich  towns,  cities,  states  and  the  nation  itself 
are  organized  for  concerted  action  in  matters  of  common 
interest,  and  for  the  prevention  of  anarchy.  It  estab- 
lishes rates  co-ordinated  with  the  value  of  the  service, 
which  are  necessarily  adjusted  to  the  expenses  of  the 
shortest  routes.  It  assists  to  preserve  all  existing  lines 
in  competitive  existence.  It  affords  an  organized  support 
to  the  enforcement  of  the  regulative  statutes.  Associa- 
tion is  the  servant  of  the  law.  Without  it  there  can  be 
no  adjustment  of  tariffs  made  which  will  conform  to  the 
administrative  provisions  of  the  act.  The  law  implies 
associate  action  as  a  necessary  pre-requisite  to  obedience. 


12/ 

One  of  the  objects  of  association  among  competitive 
carriers,  therefore,  is  the  estabHshmcnt  of  a  forum,  or 
meeting  place,  where  rates,  rules  or  regulations  govern- 
ing the  transportation  cf  all  commodities  can  be  arranged 
by  concurrent  action,  and  where  all  the  elements  attend- 
ing the  fixing  of  rates  by  one  or  more  of  the  lines  may 
be  given  full  force  in  reaching  the  resultant.  In  this 
correlation  of  forces,  the  most  direct  and  economical 
route  dominates  the  rest.  If  the  ruling  rate  thus  fixed 
is  not  a  reasonable  one,  the  act  to  regulate  commerce 
provides  control. 

An  inspection  of  the  actual  work  taken  up  by  the 
associations  at  their  meetings  will  show  that  the  raising 
of  rates  is  not,  by  any  means,  their  important  function. 
Undoubtedly  one  of  their  leading  principles  is  the  main- 
tenance of  rates  upon  a  durable  and  permanent  basis. 
Proposed  changes  in  tariffs  are  discussed  in  association 
meetings,  and  are  acted  upon  with  care.  Considerations 
based  upon  the  exigencies  of  business  and  the  stimula- 
tion of  traffic  are  those  most  frequently  urged,  while 
the  necessity  for  the  maintenance  of  revenue  counter- 
balances, to  some  extent,  the  pressure  that  is  constantly 
brought  to  bear  for  reductions  here,  there  and  every- 
where. The  scale  of  rates  throughout  the  United  States, 
as  is  well  known,  has  been  constantly  shrinking  through 
a  long  term  of  years.  At  times  a  general  scheme  of 
advancing  rates  may  be  devised  and  agreed  upon,  for 
the  purpose  of  putting  an  end  to  a  rate  war  or  of  taking 
advantage  of  an  outside  condition  like  that  wl.ich  arises 
upon  the  annual  closing  of  lake  navigation ;  but  such 
advances  as  are  accomplished  are  usually  trivial,  arising 
from  the  lining  up  of  rates  previously  reduced  to  meet 
some  special  emergency,  or  from  the  removal  of  some 


128 

factor  of  disturbance.  The  general  tendency  is  always 
in  the  direction  of  lower  rates.  In  respect  to  this  matter 
the  association  system  is  conservative.  It  tends  to 
check  unnecessary  reductions,  but  it  is  inadequate  to 
stem  the  tide  in  its  universal  ebb.  It  is  estimated  that 
the  rate  changes  considered  at  associiition  meetings  con- 
stitute almost  one-half  of  the  business  presented;  and 
that  about  ninety  per  cent,  of  such  proposed  rate 
changes  are  propositions  for  reduction,  which  are  so 
accomplished  as  to  prevent  the  preferences  and  discrimi- 
nations that  would  ensue  if  each  line  were  to  make 
reductions  for  itself 

At  the  present  time  the  usual  rate  question  is  in 
respect  to  relative  rates.  It  is  claimed  that  the  rate  at 
some  point  is  too  high  when  compared  with  the  rate  at 
some  other  point,  or  that  the  rate  on  a  given  commodity 
is  too  high  ill  comparison  with  the  rate  upon  some 
analogous  article,  or  upon  the  same  article  from  other 
sources  of  supply.  A  complaint  that  rates  are  excessive 
in  themselves,  or  as  compared  with  the  value  of  the 
service,  is  very  seldom  seriously  made. 

CO-OPERATIVE    MANAGEMENT. 

Certain  distinctions  that  exist  between  the  business  of 
transportation  and  other  branches  of  industry,  in  respect 
to  the  practical  effect  of  associated  management,  cannot 
properly  be  overlooked.  There  is  no  governmental  regu- 
lation of  the  price  of  lead,  or  sugar  or  oil.  Manufactur- 
ing and  mining  combinations,  presumably  intended  to 
restrict  production  and  increase  profits,  are  regarded 
with  suspicion  by  reason  of  the  fact  that  no  control 
exists  upon  the  prices  to  be  charged.     The  regulation 


129 

of  the  tariffs  of  common  carriers,  on  the  contrary,  has 
become  an  established  feature  of  our  legislation  and 
jurisprudence.  The  danger  apprehended  in  the  one  case 
is  altogether  absent  in  the  other. 

Another  marked  difference  between  railroads  and 
other  business  enterprises  lies  in  the  fact  that  if  the 
latter  find  their  work  unprofitable,  it  is  open  to  them  at 
any  time  to  close  their  doors.  The  loss  irwolved  is,  of 
course,  serious ;  and  a  struggle  for  continued  existence 
is  often  maintained  until  bankruptcy  ensues;  but  the 
result  of  a  lockout  or  a  failure  is  confined  to  the  owners 
and  the  operatives  of  the  particular  plant  involved ;  the 
public  are  supplied  from  other  sources.  In  the  case  of 
a  railroad  under  similar  circumstances  the  operations  of 
the  road  can  seldom  stop.  The  road  must  stay  in 
existence,  and  the  courts  assume  its  operation  when 
bankruptcy  has  destroyed  the  value  of  the  original 
investment.  New  capital  is  brought  in  through  receivers' 
certificates,  and  the  wheels  continue  to  turn.  If  the  dis- 
continuance of  a  line  is  determined  upon,  the  public  as 
well  as  the  owners  and  operatives  suffer.  Some  com- 
petitor or  some  larger  system  has  usually  found  it  for 
its  interest  to  assume  the  operation  of  bankrupt  roads; 
but  several  instances  of  abandonment  have  actually 
occurred,  and  others  are  in  sight;  cases  even  exist 
where  state  officials  are  seeking  by  legal  process  to 
compel  the  maintenance  of  worthless  branches,  for  the 
benefit  of  the  local  communities  through  which  they 
run. 

Again,  the  tendency  to  lower  rates  in  railroad  service 
under  the  stress  of  unregulated  competition  has  a 
violence  of  which  citizens  engaged  in  other  branches 
of  business  are  wholly  ignorant.     It  resembles  the  rush 


130 

of  the  cataract.  The  education  of  the  freight  agent  has 
been  in  the  direction  of  maintaining  tonnage  at  almost 
aiiy  cost.  The  net  results  are  shown  in  the  accounts  of 
the  operating  department,  which  is  separately  organized. 
One  effect  of  the  law  has  been  to  extend  the  scope  of 
all  reductions  by  making  general  what  was  formerly 
restricted,  localized  and  often  secret.  Where,  in  the 
days  before  the  law,  a  single  rate  was  cut,  the  freight 
agent  must  now  reduce  a  tariff;  and  while  he  points 
with  pride  to  the  increasing  tonnage  of  the  line,  the  loss 
of  net  revenue  may  be  excused  as  a  result  of  the  opera- 
tion of  the  statute. 

It  has  become  a  common  eriticism  upon  the  present 
form  of  congressional  regulation  of  railway  traffic,  that 
while  it  prevents  discrimination  and  protects  the  public, 
it  altogether  fails  to  protect  the  carriers.  It  presents  no 
method  of  restraint  upon  impecunious,  extravagant, 
speculative  or  unreasonably  aggressive  railway  manage- 
ment; it  leaves  the  doors  of  competition  open  to  the 
most  circuitous  routes ;  it  puts  the  strong  lines  at  the 
mercy  of  the  weak,  and  makes  it  possible  for  a  road  that 
should  never  have  been  built  to  fix  rates  which  all  other 
competing  roads  must  perforce  accept. 

And  this,  in  truth,  is  an  obvious  defect.  The  Congress 
has  assumed  the  task  of  making  provision  against  rates 
which  are  unreasonably  high,  and  rates  which  are  not 
relatively  equal,  without  providing  for  the  prevention  of 
rates  unreasonably  low,  or  for  the  protection  of  invest- 
ments which  now  form  an  immense  proportion  of  the 
country's  wealth,  represented  by  securities  which  are 
not  found  alone  in  the  vaults  of  capitalists,  but  which 
in  many  cases,  constitute  the  only  source  of  income  for 
the   comparatively  poor  and  the   otherwise   hopelessly 


131 

dependent.  The  scheme  of  governmental  regulation 
will  not  be  rounded  and  complete  until  this  omission 
is  supplied. 

State  ownership,  or  direct  national  control  of  the  rail- 
way system  of  the  country,  is  at  times  suggested  as  a 
remedy;  but  this  may  beat  once  dismissed  as  chimerical. 
No  greater  injury  could  befall  our  republican  institu- 
tions than  the  establishment  of  a  branch  of  the  public 
service  which  would  throw  open  to  the  field  of  politics 
the  railway  service  of  the  land. 

Legislative  regulation  in  the  direction  of  the  preven- 
tion of  rates  unnecessarily  low  is  not  impossible, 
although  it  has  not  been  seriously  considered.  If  it 
were  simply  to  take  the  form  of  a  provision  that  rates 
once  established  should  not  be  reduced,  except  at 
stated  periods  or  after  prolonged  announcement,  it 
would  materially  improve  the  existing  situation  in  some 
respects.  Such  restrictions,  however,  might  at  times 
operate  unjustly,  and  occasionally  would  divert  traffic 
for  a  time  into  unreasonable  channels.  So  lone  as 
carriers  are  independent,  and  some  of  them  irresponsible, 
occasions  wall  arise  where  prompt  action  may  be 
necessary. 

The  theory  of  the  law  up  to  the  present  time  has  been 
that  railway  owners,  having  the  rate  making  power  in 
their  own  hands,  are  competent  to  protect  their  revenues. 
If  the  premises  were  correct  the  conclusion  would  follow; 
but  the  theory  is  applied  to  a  situation  where  independent 
action  by  six  hundred  different  carriers  is  preserved  ;  and 
it  is  not  true,  as  a  practical  matter,  that  any  one  of  them 
can  control  its  own  rates.  On  the  contrary,  the  rates  of 
every  line  are,  to  a  greater  or  less  degree,  at  the  mercy 
of  its  rivals.     There  is  but  one  way  in  which  the  prosper- 


132 

ity,  or  even  the  prolonged  existence,  of  independent 
railway  corporations  can  be  maintained  under  exist- 
ing legislation ;  namely,  through  co-operation  among 
railways  themselves  in  preserving  their  tariffs  from 
destruction. 

This  co-operation  may  take  two  forms ;  associate  action, 
subject  to  the  regulation  of  the  law,  or  consolidation  of 
titles  and  control. 

Railway  consolidations,  or  "  trusts,"  as  they  are  often 
unthinkingly  termed,  are  among  the  popular  bugbears  of 
the  day.  Some  of  the  distinctions  which  differentiate 
them  from  the  "trusts  "  that  have  been  formed  in  other 
directions,  have  been  alluded  to  above;  and  it  is  safe  to 
say  that  no  consolidations  or  combinations  among  rail- 
roads are  imminent  at  the  present  time  which  are  likely 
to  operate  otherwise  than  favorably  to  public  interests. 
But  the  public  mind  is  aroused  upon  the  general  subject, 
and,  while  usually  just,  it  is  not  ready  to  distinguish.  It 
is  undeniable  that  the  present  time  is  not  a  favorable  one 
for  the  unification  of  competing  roads  in  common  owner- 
ship, or  even  in  joint  control.  The  American  system  has 
been  estabhshed  upon  a  contrary  basis,  involving  the 
maintenance  of  competitive  conditions.  As  a  last  resort, 
and  in  default  of  any  other  solution  of  the  question, 
actual  immense  consolidations  may  eventually  arise.  At 
the  present  time  their  necessity  has  not  been  demon- 
strated to  the  public  eye,  and  their  formation  would 
arouse  antagonism  in  many  quarters.  As  has  been  well 
said,  however,  unless  railway  managers  can  associate, 
railway  owners  must  combine. 

When  revolutions  of  this  character  occur,  the  move- 
ment is  usually  sudden  and  unexpected.  The  association 
experiment,  which  is  now  in  progress  of  trial,  is   unmis- 


133 

takably  in  the  nature  of  a  breakwater  against  the  so- 
called  railway  "trust."  If  this  fact  can  be  clearly  recog- 
nized, and  the  usefulness  of  railway  associations  sus- 
tained, while  their  power  is  strengthened,  the  existing 
system,  for  a  time,  at  least,  can  be  preserved.  In  order 
to  secure  this  result  it  is  necessary  that  the  public  should 
understand  the  nature  of  their  work  and  their  value,  and 
that  their  results  should  receive  some  governmental 
sanction.  Central  bureaus,  with  power  to  establish  and 
adjust  reasonable  rates  through  large  sections  of  territory 
where  traffic  is  competitive,  are  indispensably  required. 
This  is  going  far  beyond  the  work  of  the  present  asso- 
ciations, but  the  matter  can  be  arranged  by  the  roads 
among  themselves,  through  the  employment  of  a  reason- 
able amount  of  good  sense  and  as  much  good  faith  as 
usually  pertains  to  ordinary  business  transactions,  pro- 
vided that  their  tariffs  continued  to  be  recognized  as  prima 
facie  )\xsX.^  though  subject  to  proper  revision  and  control, 
and  their  arbitrations  are  supported  by  authority  for  the 
enforcement  of  awards.  In  controversies  between  man 
and  man  an  award  of  arbitrators  may  be  made  the  basis 
of  a  suit  at  law,  and  a  judgment  is  rendered  in  order  to 
compel  the  payment  of  money  so  found  due.  A  money 
judgment,  however,  is  not  appropriate  to  awards  between 
competing  carriers.  They  relate  to  the  establishment  of 
rates,  the  adjustment  of  divisions,  and  the  preparation  of 
rules  and  regulations  for  the  conduct  of  traffic.  They 
deal  with  the  future,  not  the  past,  and  mandatory  process 
is  required  for  their  execution.  It  is  believed  that  an 
amendment  to  the  sixteenth  section  of  the  act  to  regulate 
commerce  might  very  properly  provide  that  the  courts 
of  the  United  States  sitting  in  equity  should  entertain 
jurisdiction  of  awards  rendered  in  arbitrations  between 


134 

carriers,  or  between  associations  of  carriers,  respecting 
interstate  commerce,  and  should  hav^e  power  to  enforce 
them  by  any  appropriate  process,  subject  to  the  rules 
which  govern  the  consideration  of  awards  for  the  pay- 
ment of  money  in  courts  of  law 

This  idea  is  not  novel;  in  1885  the  Railway  Commis- 
sioners of  the  state  of  Kansas  used  the  following 
significant  language: 

"  Since  the  \aolcnt  fluctuations  of  rates,  consequent  on 
rate  wars  between  rival  lines,  result,  usually,  in  discrimi- 
native benefits  to  a  few  at  the  ultimate  expense  of  the 
public,  means  should  be  taken  to  at  least  moderate  this 
disturbing  element  to  the  business  interests  of  the 
country.  As  a  means  to  this  end,  we  venture  to  suggest 
that  contracts  or  agreements  between  rival  companies  to 
carry  on  interstate  traffic  upon  given  rates,  providing 
those  rates  are  reasonable  and  just,  should  be  invested 
with  a  legal  status  and  be  enforcable  with  appropriate 
sanctions." 

In  the  same  year  a  somewhat  similar  thought  was 
thus  stated  by  Hon.  T.  M.  Cooley : 

"  The  question  then  presents  itself  whether  the  final 
solution  for  the  '  railroad  problem '  is  not  Hkely  to  be 
found  in  treating  the  railroad  interest  as  constituting  in  a 
certain  sense  a  section  by  itself  of  the  poUtical  commu- 
nity, and  then  combining  in  its  management  the  state, 
representing  the  popular  will  and  general  interests,  with 
some  definite,  recognized  authority  on  the  part  of  those 
immediately  concerned;  much  as  state  and  local 
authority  are  now  combined  for  the  government  of 
municipalities." 


135 

The  wisdom  of  these  pregnant  utterances  has  been 
demonstrated  by  the  result  of  the  experiment  which  has 
been  conducted  for  nearly  three  years  upon  narrower 
lines.  The  statesman  who  can  effect  the  required  co- 
ordination of  governmental  regulation  with  associated 
railway  management,  will  prolong  for  many  years  the 
American  system  of  universally  competitive  railway 
service.  Without  some  such  provision  the  statute  is 
incomplete.  The  only  other  natural  solution  of  existing 
difficulties  appears  to  be  through  actual  consolidations  of 
ownership,  by  which  all  traffic  in  great  sections  of  the 
country  can  be  brought  under  the  control  of  a  single 
mind. 


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